Monday, November 20, 2006

Lapindo to Freehold, hold on!

I bet the following information would add more confusions. Today PT Energi Mega Persada (EMP) Tbk disclosed the selling price of Lapindo Brantas Inc to Freehold Group is US$1 million. Compare that with USD2 when it plans to sell to Bakrie Oil. No explanation why now USD1 million. But the following might answer that.

Under the sales & purchase agreement with Freehold (BVI), EMP has no right over-riding-royalty interest, no exclusive right to buyback the shares of KEL and PAN which control Lapindo Brantas Inc, no option to buyback KEL & PAN, and no obligation to provide technical assistance to buyer.
The SPA with Freehold, controlled by Singapore-registered Alsace Pte Ltd, set EMP free from any claim or charges, including those related to Banjarpanji mudflow in Sidoarjo, East Java. Nice!
When asked by JSX what is the relationship between Minarak Labuan Co (L) Ltd, a vehicle company owned by Bakrie, and the divestment of KEL & PAN to Freehold, EMP didn't clearly answer that. JSX asked that because Minarak stated last week that it had committed to provide funds needed by Lapindo Brantas to serve its obligation under Presidential Decree No. 13/2006.
If we should believe in EMP's statements that no relationship between Freehold and Bakrie, we must say that Minarak Labuan is a generous company. It's strange as well to understand why would someone want to invest USD1 million only to take other people's responsibility which could cost hundreds of million USD?
Asked about who will take the responsibility over the mudflow, EMP said it should be shared by three companies (Lapindo, Medco, and Santos) based on operating agreement signed in 1992. Lapindo owns 50% working interest in the Brantas PSC, with Medco and Santos hold 32% and 18% respectively. Medco declined to take the responsibility and filed Lapindo to International Arbitration Body in New York instead.

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