MIND ID Acquires 14% Stake in Vale Indonesia; Spends US$300mn

TEMPO.CO, Jakarta - An agreement has finally been reached for the divestment of Vale Indonesia (IDX: INCO) shares. Two of Vale Indonesia's shareholders, Vale Canada Limited and Sumitomo, agreed to divest 14 percent of their shares proportionally to MIND ID, the holding for SOEs engaged in the mining sector, at a price of Rp3,050 per share.

INCO's information disclosure reported that MIND ID took a 14 percent stake, equivalent to 1,391,087,420 shares if all are acquired through secondary sales. MIND ID president director Hendi Prio Santoso said that the transaction would take place in primary as well as secondary sales and that the company must pay US$300 million to acquire Vale Canada and Sumitomo's shares.

Hendi stated that the company is preparing a budget from its treasury and intends to secure funding from banks to settle the transaction. He declined to disclose the specific amounts for each financing scheme.

"The payment is scheduled in June," Hendi said at the Pullman Hotel in Jakarta on Monday, February 26.

Vale Canada Limited (VCL) and Sumitomo Metal Mining (SMM) initially controlled 43.79 percent and 15.03 percent in INCO. After the divestment, their ownership will decrease to 33.9% and 11.5%, respectively. VCL stated in writing that the company would receive US$160 million from this transaction.

Deputy Minister of State-Owned Enterprises, Kartika Wiraatmadja, stated that in addition to redeeming old shares belonging to VCL and SMM, one transfer scheme would involve issuing new shares through a rights offering.

"It will be a 50-50 split, newly issued shares and existing shares," he said.

VINDRY FLORENTIN

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