DIGIVESTASI - Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif announced that a final decision has been made on the acquisition of PT Vale Indonesia Tbk (INCO) shares by state-owned mining holding company MIND ID.

He confirmed that the two companies had agreed to announce a share price of 14%. The acquisition price is agreed to be below Vale's current share price or around Rp 3,000 per share. "(Vale's share price) is at least IDR 3,000 cheaper," said Arifin, Directorate of Oil and Gas DKI Jakarta, quoted on Tuesday (February 20, 2024). 

Ariffin said the price included a discount from the market price. He also announced that he would announce the completion of the sale of Vale shares in the coming days. "We hope that in the next few days it can be signed. We are waiting for a few days, but hopefully it will be completed. The team is working. Please be patient," he said.  

Previously, SOE Minister Eric Tohir informed MIND ID Mining Industry Holding about the negotiation of the selling price of 14% of the shares issued by PT Vale Indonesia Tbk (INCO). They demanded that the selling price be reduced as low as 14%. "We are still negotiating. Yes, we are negotiating for the lowest possible price," Eric said at the Ministry of Energy and Mineral Resources (ESDM) Office for Just Energy Transition Partnership (JETP) Financing. , Jakarta, Tuesday (November 21, 2023). 

As is known, the sale of Vale is one of the conditions for PT Vale Indonesia's work contract (KK), which ends in December 2025, to be extended to a special mining license (IUPK). MIND ID's shareholding in PT Vale in India Tbk (INCO) is currently only 20%, with around 21.18% 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 43.79% ownership, followed by Sumitomo Metal Mining. Ltd (SMM) 15.03%. 

Is it cheap?  

Avere Investama Director Teguh Hidayat estimates that the price of 14% of PT Vale Indonesia Tbk (INCO) shares transferred to MIND ID Mining BUMN Holding is around Rp 3,400-3,800 per share. This is in response to Minister of Energy and Mineral Resources Arifin Tasrif's statement that the share purchase price agreed by the two companies will be lower than Vale's current share price, which is around Rp 3,000 per share. to be.

"So he said less than Rp 3,800, but above Rp 3,000, which means the range is quite wide, so we take the middle one, Rp 3,400. If the government gets that price, you could say the profit is really big, 'big'," Teg told CNBC Indonesia, Monday (February 19, 2024). 

According to him, MIND ID's corporate activities are more than just acquiring 14% of Vale's shares. In addition, MIND ID will control the majority of shares and become INCO's controller. "Therefore, yesterday the Director General and Chief Executive Officer of INCO resigned and there was disclosure and there will indeed be a replacement from MIND ID. So most likely the government will appoint a President Director." he said. Teg said the acquisition process usually uses an intrinsic value calculation, which compares the current value of the company with the potential cumulative profits that the company can generate in the future. 

"When we only calculate the value of the company, we use the book value, which is approximately $4,000 per share. This does not take into account the potential future earnings of the company, only the book value. So, even if you buy it for 4,000, it's already cheap because you get an asset worth 4,000, but in the future you will get 400 silver or 800 silver," he said. 

Previously, Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif announced that an agreement had been reached on the final decision regarding the acquisition of PT Vale Indonesia Tbk (INCO) shares by state-owned MIND ID Mining Holding. He confirmed that the two companies had agreed to announce a share price of 14%. The acquisition price is agreed to be below Vale's current share price or around Rp 3,000 per share. "(Vale's share price) is at least Rp 3,000 cheaper," said Arifin, Directorate of Oil and Gas DKI Jakarta, quoted on Monday (February 19, 2024). 

Ariffin said the price included a discount from the market price. He also announced that he would announce the completion of the sale of Vale shares in the coming days. "We expect it to be signed in the next few days." Let's wait a few more days. We hope to finalize it on Monday, but the team is still working on it. Be patient," he said.

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