Newmont Ventures withdraws voting rights
Friday, September 16 2011 - 03:20 AM WIB
Newmont Ventures received voting rights as part of a guarantee for the loan it provided to PT Indonesia Masbaga (IMI) several years ago to purchase 2 percent of NTT?s shares from PT Pukuafu Indah,
NVL?s vice president Blake Rhodes confirmed that the company had voluntarily withdrawn the voting rights to ensure that the polemic over the voting rights would not impede the process of the mandatory divestment program.
Rhodes said that the company obtained the voting rights as a protection in the event that Indonesia Masbaga failed to repay the loan. ?We have never used the voting rights because there is no problem with the loan payment,? he said.
NVL received the voting rights as the legal consequence of the deal in which the 2 percent of NTT shares bought by Indonesia Masbaga from Pukuaafu was used as collateral for the loan payment.
According to him, such a practice is common business transaction. In its financial report, PT Bumi Resources Mineral Tbk publicly revealed that Credit Suisse had also receive voting rights in NTT as part of the guarantee of its loan given to PT Multi Daerah Bersaing (MDB), which owns a 24 percent stake in NTT.
The 24 percent stake in NTT was given to Credit Suisse as collaterals of its debts. In addition, the financial company also received a letter which gives it a right to sell the shares in the event MDB fails the loan payment.
The controversy grew after NVL unveiled in its financial report that Indonesia Masbaga had transferred the ownership of the 2 percent stake in NNT as collaterals to protect its loan. NVL also received the voting rights from the ownership of the 2 percent stake.
The controversy had impeded the finance ministry?s plan to buy the final 7 percent of NNT shares which should be sold to the government or local companies as part of the mandatory divestment.
The voting rights obtained by NVL over the 2 percent of NTT shares was against the mandatory divestment program.
Under a contract of work signed in 1986, PTNNT?s foreign shareholders, Newmont Corporation and Sumitomo of Japan, had to divest 51 percent of their shares to local investors after five years of commercial operation as part a mandatory divestment program.
However, they are required only to divest 31 percent because the 20 percent of the shares are already held by local companies. To comply with the divestment obligation, Newmont and Sumitomo had sold 24 percent of their ownership to Multi Daerah Bersaing (MDB), a joint venture between PT Multicapital, a business unit of coal giant PT Bumi Resources, and the local administrations.
The finance ministry has agreed to buy the remaining 7 percent of the shares. (*)