Firm! SOE Minister Threatens To Shrink Vale Land If Divestment Stock Prices Are Not Given Cheaply
JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir ensured that the share price of PT Vale Indonesia's divestment proceeds to the MIND ID holding would be carried out at the cheapest possible price.
It is known that Vale agreed to release 14 percent of his shares to Indonesia as one of the full extensions of the contract in Indonesia.
"Yes, the price negotiations are as cheap as possible," Erick told the media quoted on Wednesday, November 22.
Erick said the price given must be special or below market prices and if it is not met by Vale, the government will take steps to shrink land or relinquish.
This was done because Vale was deemed not to have carried out his investment commitment in accordance with the Work Contract (KK).
"Yes, you can't (premium price). If that's the case, some of theirs are not in accordance with their commitments," continued Erick.
Erick was reluctant to give a leak about Vale's stock price range and the progress was because negotiations were still ongoing.
Although the initial agreement has been implemented and stated in the Head of Agreement (HoA), he said, it does not mean that the share price has been agreed upon.
He wants to ensure that INCO's share valuation must be good because it is the responsibility of MIND ID as the controller.
"I don't know, we'll negotiate later. That's why I said, tough negotiations don't mean, right, we run the MoU, we agree. But the valuation must be good. Because this is our responsibility," explained Erick.
He also admitted that the mining practices carried out by Vale had so far been very good.
It is proven from several foreign companies that enter and will run their business in sustainable nickel development.
"What Vale did was very positive. Because there is Volkswagen, there is also Ford, but there is a long-term commitment that they have not made at that time. So if it becomes part of checking up, they have an unfair valuation," concluded Erick.
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Previously, PT Vale Indonesia Tbk (INTO) together with shareholders, namely Vale Canada Limited (VCL), PT Mineral Industri Indonesia (Persero) (MIND ID), and Sumitomo Metal Mining Co., Ltd (SMM) signed an Initial Agreement (Perjanjian) for divestment obligations in San Francisco, United States.
In this agreement, VCL and SMM will divest their share ownership in PT Vale by around 14 percent to MIND ID, so MIND ID will become the company's largest shareholder.
Detailed arrangements regarding the transaction mechanism will be finalized in the form of a definitive agreement and transactions are expected to be completed in 2024, depending on the usual closure conditions.