SOE Holding Will Have Enough Funds to Acquire Freeport`s Shares

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  • TEMPO.CO, Jakarta - The government is convinced that the state-owned enterprises holding (SOEs holding) would be able to acquire Freeport Indonesia`s shares using loans from state-owned banks, should the funds from equity be insufficient.

    Fajar Harry Sampurno, deputy of mining business, strategic industries, and media at the State-Owned Enterprises Ministry, the role of state-owned banks would be important just like Medco acquired Newmont in the past.

    “If [state-owned banks] helped Medco, they should help SOEs too. State-owned banks will help because it’s a form of synergy,” he said.

    Harry revealed that during the consolidation, the mining SOE holding’s equity amounted to Rp65 trillion, which will be increased three folds, so it will not hamper the company’s financial performance.

    Read: Jonan Wants Freeport to List on IDX

    Meanwhile, the remaining share divestment value to be acquired by the government is still being negotiated.

    “Let’s say the figure is US$3 billion. The leverage would be Rp120 trillion, so it’s self-explanatory,” Harry explained.

    The mining SOE holding is established to improve the business and funding capacity, mineral and coal resources management, and added values through establishing downstream industries, increasing local contents, and making the synergy cost efficient. Another goal is to acquire 51 percent of Freeport’s shares divested for the government.

    Read: Freeport Divestment Completed in Q1 2019

    In the short run, the holding that will be officially inaugurated on November 29 will take series of corporate actions, including constructing smelters in West Kalimantan with a capacity of 2 million tons per year, in East Halmahera with a capacity of 13,500 tons per year, and build a steam-fueled power plant worth 1,000 megawatts.