Release: Newmont verifies Indonesia Masbaga Investama?s 2.2% stake
Monday, July 4 2011 - 01:17 AM WIB
?PTIMI owns the 2.2% stake and, therefore, possesses the right to vote its shares and has done so,? said Blake Rhodes, NVL?s Vice President. ?NVL only has an ability to vote PTIMI?s shares in the event the company defaults on its loan obligations. This arrangement is a common element of a security package for corporate financing transactions in Indonesia and elsewhere.?
NVL?s parent company has disclosed in its Form 10-K filed with the United States Securities and Exchange Commission the extension of the loan to PTIMI and provided a description of the related security interests. For further elaboration, as part of NVL?s agreement to ensure repayment of its loan to PTIMI, NVL has taken a standard Indonesian security package, consisting of a pledge of shares and an assignment of dividends, together with a power of attorney to sell the PTIMI shares and vote them in the event of a PTIMI default. This is a similar type of security package the senior lenders to PTNNT held in respect of the foreign shareholders? shares and PTPI?s shares for more than a decade until the project loan was paid off in February 2010. During the period of the senior loan, it is clear that the senior lenders did not control, through such a power of attorney, the foreign shareholders? shares or PTPI?s shares in PTNNT.
PTNNT?s Contract of Work (CoW) contemplates that divestiture shares will be offered to ?Indonesian nationals or Indonesian companies controlled by Indonesian nationals.? PTPI?s founder?s shares ? including the shares it sold to PTIMI ? are not part of the 31% stake targeted for divestiture. The divestiture shares are those owned (or that were owned) by the foreign shareholders of PTNNT, not the shares already owned by Indonesian shareholders such as PTPI. Nonetheless, PTIMI meets the definition of an Indonesian entity for divestiture purposes as it is a company controlled by a combination of Indonesian nationals and Indonesian entities controlled by Indonesian nationals.
PTNNT?s CoW does not restrict from whom an Indonesian shareholder can obtain financing. Allegations that NVL?s provision of financing to PTIMI is illegal have no basis of support in the law or under the CoW.
?If the CoW or other Indonesian law prohibits a financier from holding such power of attorney then we will correct it,? said Rhodes. ?Nevertheless, we are not aware of any such prohibition.?
NVL noted that all of PTNNT?s current shareholders have generally agreed to support the application of Newmont?s and Nusa Tenggara Mining Corporation?s international first-class policies, procedures, practices, and standards to the operation of Batu Hijau, including in the areas of environment; health, safety & loss prevention; corporate social responsibility; anti-bribery & anti-corruption; supply chain management; information technology; technical; human resources; asset management; inventory management; financial & tax; and cash management.
?As we strive to achieve our vision to be the most respected and valued mining company, we have an operating philosophy focused on industry leading performance in safety, environmental stewardship and social responsibility,? said Rhodes. ?Do we have a desire to align ourselves with shareholders who we believe share and will vote in support of our operating philosophy? Absolutely. We?d be less than candid if we said otherwise. We think that is good business, and we believe our employees and the communities around Batu Hijau expect and deserve nothing less.? (end of release)