Mystery! DPR Not Yet Year Price 14% Vale Shares News – 13 hours ago

Jakarta, CNBC Indonesia – The plan to release 14% of PT Vale Indonesia Tbk (INCO) shares to MIND ID is currently still based on price issues. In fact, it is reported that Vale Canada Ltd (VCL), as the majority shareholder, has set a fairly high price.

Member of Commission VII DPR RI, Mulyanto admitted that he did not know for sure the value of the 14% of INCO shares that would be transferred to MIND ID. However, he hopes that the share price offered by Vale Canada Ltd (VCL) will be below market price and affordable for mining holdings.

“Don’t know yet, negotiations with the Minister of BUMN,” said Mulyanto to CNBC Indonesia, Friday (24/11/2023).

Mulyanto said that the Indonesian government actually made it possible to intervene with Vale Canada Ltd (VCL) to provide the best price. Bearing in mind, this divestment is a requirement for INCO to obtain an extension of its Special Mining Business License (IUPK).

“Yes, you can (intervene). These are conditions related to licensing. The government can not give permits, reduce business areas and so on. Except if you buy on the stock exchange. That’s the market price,” he said.

Meanwhile, Deputy Chairman of Commission VII DPR RI, Eddy Soeparno, said that matters of divestment, company control, valuation, operational control and financial control are corporate or business-to-business (B2B) matters. So, according to him personally, this is not the domain of Commission VII.

“I mean, we in parliament can only provide input but there is no pressure, let alone making legislation, we have nothing to do with that,” he said.

Eddy believes that whether or not INCO’s assets and reserves can be consolidated into the state’s wealth book also depends on accounting rules.

“In the accounting rules there is a clause that says that if a shareholder has controlling influence or control influence it is not absolute 50% plus 1%, but for example, with 34% he can consolidate as long as it is accepted by the public accountant who carries out the audit,” he said.

Previously, the Director of Avere Investama, Teguh Hidayat, said that the price of the 14% shares of PT Vale Indonesia Tbk (INCO) which will be transferred to the MIND ID Tambang BUMN Holding is expected to be above the company’s book value. INCO’s book value is currently at IDR 4,000 per share.

According to Teguh, if we refer to the previous acquisition price of PT Freeport Indonesia shares by MIND ID, the price of shares to be released by Vale Canada Ltd (VCL) as the current controller could reach double the book value.

“INCO’s book value is Rp. 4,000 per share. If you use the previous Freeport acquisition price, the price is twice the book value, so Rp. 8,000 per share. But maybe you can find it at Rp. 5,000 – 6,000 per share,” said Teguh.

Furthermore, Teguh assesses that the process of negotiating the share release price is projected to be quite long. Moreover, the Ministry of BUMN as the shareholder of MIND ID wants to buy INCO shares at the lowest possible price.

“So the government wants it to be as cheap as possible, but we use the logic that if it’s from Vale, of course they don’t want to sell cheaply because of what? With this divestment, Vale’s controlling portion in INCO is reduced. The company is no longer controlled by them, the logic is that if that’s the price “You also have to buy the maximum amount,” said Teguh.

As is known, Indonesia’s share ownership in INCO via MIND ID is currently only 20%, and around 21.18% is spread across the Indonesian stock market. This means that if the additional shares are only 14%, then MIND ID will own 34% of Vale’s shares.

Meanwhile, the majority of Vale’s shares are currently held by Vale Canada Limited (VCL) with a composition of 43.79% shares, then Sumitomo Metal Mining Co. Ltd (SMM) of 15.03%.

However, it is still uncertain whose shares will be reduced, whether only those belonging to VCL or together with shares belonging to Sumitomo Metal Mining Co Ltd (SMM).

[Gambas:Video CNBC]

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