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Indonesia to sell shares in coal miner

Staff and wires

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JAKARTA, Indonesia -- Indonesia said Monday it will sell up to 346.5 million shares in state-controlled coal miner PT Tambang Batubara Bukit Asam during an initial public offering in December.

This equals 16.26 percent of the company's enlarged share capital. The shares will have a nominal value of 500 rupiah each.

The coal company is expected to acquire a valuable new asset soon -- a 20 percent stake in Indonesia's biggest coal exporter, Kaltim Prima, valued at about $165 million.

For the past two years, Anglo-Australian miner Rio Tinto and oil giant BP have been trying to sell a 51 percent stake in Kaltim Prima for about $420 million under the terms of their contracts.

But the divestment deal has been bogged down in Indonesian domestic politics and legal manoeuvers, during which the Indonesian assets of Rio Tinto and BP were attached by a court.

Shareholdings settled

An agreement was reached in August with the central government covering the 51 percent stake for Indonesian interests.

This now will be held 20 percent by Tambang Batubara and 31 percent jointly by the East Kalimantan provincial government and the East Kutai regency, where the mine is located.

The initial public offer by Tambang Batubara next month will include the sale of 315 million shares held by the government and 31.5 million in new shares, underwriter Danareksa Sekuritas said in a newspaper announcement.

Proceeds from the divestment will be used to help raise budget revenues while proceeds from the sale of new shares will be used to strengthen the company's working capital.

Up to 173.25 million warrants will also be issued as part of the offer, with the holder of a new share entitled to buy one share.

Reuters contributed to this report.

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