Wednesday, 22 May 2019 | 05:31 WIB

Freeport Indonesia to Issue New Shares if It Agrees with Gov’t Divestment Plan

Freeport Indonesia to Issue New Shares if It Agrees with Gov’t Divestment Plan

JAKARTA, NETRALNEWS.COM – United States-based mining company Freeport Indonesia will issue new shares in the divestment process. The new shares will then be acquired by the government to become majority shareholder in the company.

"In the shares divestment process, new shares will be issued. Therefore, the government will buy the new shares instead of the current shares owned by Freeport Indonesia,”," said Secretary General of the Ministry of Energy and Mineral Resources, Teguh Pamudji, on Wednesday (7/26).

The government currently owns 9.36 percent shares in Freeport Indonesia. The government needs to acquire around 41 percent more shares to increase its stakes to 51 percent and become majority shareholder of the company.

Previously, the government has decided that state-owned enterprises (SOEs) will take over the remaining shares that will be released by Freeport. This is in accordance with the rule that Freeport is required to divest the shares by 51 percent.

Teguh revealed that the divestment is planned to be done by SOEs, and an independent valuator independent valuator who is in charge of calculating the value of Freeport shares to be purchased by the government will be appointed.

"41 percent will be counted by an independent valuator."

However, Teguh explained, the Freeport submitted a proposal to the government that there are some stocks sold on the stock market. "But we already have our own mechanism, that's just the discourse that was delivered," he said.

According to Teguh, the government hopes to complete negotiations with Freeport in October. Next week there will be a re-meeting between the Minister of Energy and the Minister of Finance on the matter.