Saturday, July 11, 2009

Local admin engages BUMI in acquiring Newmont

Three local administrations in West Nusa Tenggara (NTB) have reportedly decided to appoint PT Multicapital, a subsidiary of mining giant PT Bumi Resources (BUMI) Tbk, in acquiring 10% shares of copper-gold mine PT Newmont Nusa Tenggara for about US$391 million. 
Media Indonesia quoted Andy Hadianto, CEO of PT Daerah Maju Bersaing---a company established by local administrations in NTB, today saying three administrations---NTB provincial administration, Sumbawa Regency, and West Sumbawa---had on Saturday, July 11, decided to pick PT Multicapital as partner in the acquisition of Newmont shares.
Hadianto said the decision was made by NTB governor KH M. Zainul Majdi, West Sumbawa Regent Zulkifli Muhadli, and Sumbawa Regent H. Jamaludin Malik. Attending the meeting was DMB management.
Multicapital won the race over Media Group, PT Sinar Tambora Rinjani, Valco, Amstelco Plc, and PT Multi Indonesia Trading. According to the deal with DMB, Multicapital will finance 100% of total consideration. Revenues from the 10% investment will be shared down to Multicapital 25% and DMB 75%. DMB and Multicapital will have to establish a new joint venture for the acquisition and shall be ready in 14 days.
NTB administrations have also wrote a letter to President SBY asking central government's approval to acquire another 21% shares to be divested by Newmont until 2010. Government predicts value of 100% shares of NNT between US$3.3 to 3.5 billion. So, total value of the 21% would be around US$700 million.
The JV between Multicapital and DMB need at least US$1.1 billion of financing to acquire a combined 31% shares in NNT. This JV could control majority stake in NNT if they could also acquire Merukh's 20% shares in the company. 

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