Juridical Analysis Procedures for Divestment of Shares and Mechanisms for Determining Arga Shares Divestment in Mining Business Activities Based on Minister of Energy and Mineral Resources Regulation Number 9 of 2017
Introduction
The divestment of shares in the mining sector in Indonesia is a strategic step taken by the government to improve the welfare of the community. This is achieved through the arrangement stipulated in the Minister of Energy and Mineral Resources Regulation (ESDM) Number 9 of 2017. The regulation requires the holders of the Mining Business Permit (IUP) of Production Operations and IUPK Production operations to divest, thereby providing opportunities for local participants to have a majority of shares in foreign companies operating in Indonesia. In this writing, we will discuss the procedures and mechanisms for determining divestment stock prices in the mining sector in Indonesia.
Background
The divestment of shares in the mining sector in Indonesia is not a new concept, but rather an integral part of investment activities. However, the procedure for divesting shares and the mechanism for determining the price of divestment shares is a new issue that requires more attention. This can be seen from the evolution of applicable regulations, where the initial regulation was issued in 2013 and underwent significant changes in 2017. The regulation requires the holders of the Mining Business Permit (IUP) of Production Operations and IUPK Production operations to divest, thereby providing opportunities for local participants to have a majority of shares in foreign companies operating in Indonesia.
Procedure for Divesting Shares
According to the Minister of Energy and Mineral Resources Regulation No. 9 of 2017, there are two main ways to divest shares. First, through direct supply to the government and regional governments . This method allows investors to offer their shares directly to government agencies, so as to provide opportunities for the state to participate in controlling natural resources. Second, if the divestment is carried out to the State-Owned Enterprises (BUMN) or national private business entities, the divestment process is carried out through auction mechanisms . This auction aims to ensure that the bid process is carried out transparently and competitively, thus providing better value for all parties involved.
The Mechanism for Determining Divestment Stock Prices
The mechanism for determining divestment stock prices refers to the principle of determining a fair market price (fair market value). This means that the price offered for the indigested stock must reflect the economic value that applies in the market at that time. This reasonable market price assessment is very important so that all parties feel benefited and to maintain a balance between the interests of investors and the state. This process must also involve an objective evaluation so that there is no misuse in pricing that can harm any party.
Factors to Consider in Determining Divestment Stock Prices
There are several factors that must be considered in determining divestment stock prices. First, the market value of the company . The market value of the company is an important factor in determining the price of the divested stock. This is because the market value of the company reflects the economic value of the company. Second, the industry average . The industry average is another important factor in determining the price of the divested stock. This is because the industry average reflects the average market value of companies in the same industry. Third, the company's financial performance . The company's financial performance is also an important factor in determining the price of the divested stock. This is because the company's financial performance reflects the company's ability to generate revenue and profits.
Conclusion
With a clear arrangement regarding the procedures and mechanisms for determining divestment stock prices, it is hoped that the divestment process in the mining sector in Indonesia can run more transparently and accountably. This policy is not only aimed at increasing the control of shares by local investors, but also to ensure that the management of natural resources in Indonesia can be done more just, so that in turn can improve the welfare of the community. In the future, it is important for the government and related parties to continue to renew regulations and carry out evaluations of existing policies in order to adapt to the dynamics of the market and community needs.
Recommendations
Based on the analysis of the procedures and mechanisms for determining divestment stock prices, the following recommendations are made:
The government should continue to renew regulations and carry out evaluations of existing policies in order to adapt to the dynamics of the market and community needs.
The government should ensure that the divestment process is carried out transparently and competitively, so as to provide better value for all parties involved.
The government should consider the market value of the company, industry average, and company's financial performance in determining the price of the divested stock.
The government should ensure that the divestment process is carried out in a fair and just manner, so as to improve the welfare of the community.
Limitations of the Study
This study has several limitations. First, the study is based on secondary data . The study relies on secondary data from various sources, including primary, secondary, and tertiary legal materials. Second, the study only focuses on the procedures and mechanisms for determining divestment stock prices . The study does not consider other factors that may affect the divestment process. Third, the study only considers the mining sector in Indonesia . The study does not consider other sectors or countries.
Future Research Directions
Based on the analysis of the procedures and mechanisms for determining divestment stock prices, the following future research directions are suggested:
A study on the impact of the divestment process on the economy and community.
A study on the effectiveness of the divestment process in increasing the control of shares by local investors.
A study on the factors that affect the divestment process, including market value, industry average, and company's financial performance.
A study on the divestment process in other sectors or countries.Frequently Asked Questions (FAQs) on Juridical Analysis Procedures for Divestment of Shares and Mechanisms for Determining Arga Shares Divestment in Mining Business Activities Based on Minister of Energy and Mineral Resources Regulation Number 9 of 2017
Q1: What is the purpose of the Minister of Energy and Mineral Resources Regulation Number 9 of 2017?
A1: The purpose of the Minister of Energy and Mineral Resources Regulation Number 9 of 2017 is to regulate the divestment of shares in the mining sector in Indonesia, with the aim of increasing the control of shares by local investors and ensuring that the management of natural resources in Indonesia is done more justly.
Q2: What are the procedures for divesting shares in the mining sector in Indonesia?
A2: According to the Minister of Energy and Mineral Resources Regulation Number 9 of 2017, there are two main ways to divest shares in the mining sector in Indonesia. First, through direct supply to the government and regional governments . This method allows investors to offer their shares directly to government agencies, so as to provide opportunities for the state to participate in controlling natural resources. Second, if the divestment is carried out to the State-Owned Enterprises (BUMN) or national private business entities, the divestment process is carried out through auction mechanisms . This auction aims to ensure that the bid process is carried out transparently and competitively, thus providing better value for all parties involved.
Q3: What are the factors that must be considered in determining divestment stock prices?
A3: There are several factors that must be considered in determining divestment stock prices. First, the market value of the company . The market value of the company is an important factor in determining the price of the divested stock. This is because the market value of the company reflects the economic value of the company. Second, the industry average . The industry average is another important factor in determining the price of the divested stock. This is because the industry average reflects the average market value of companies in the same industry. Third, the company's financial performance . The company's financial performance is also an important factor in determining the price of the divested stock. This is because the company's financial performance reflects the company's ability to generate revenue and profits.
Q4: What are the benefits of the divestment process in the mining sector in Indonesia?
A4: The benefits of the divestment process in the mining sector in Indonesia include:
Increasing the control of shares by local investors
Ensuring that the management of natural resources in Indonesia is done more justly
Providing opportunities for the state to participate in controlling natural resources
Ensuring that the bid process is carried out transparently and competitively
Providing better value for all parties involved
Q5: What are the challenges of the divestment process in the mining sector in Indonesia?
A5: The challenges of the divestment process in the mining sector in Indonesia include:
Ensuring that the divestment process is carried out transparently and competitively
Ensuring that the price of the divested stock is fair and just
Ensuring that the divestment process is carried out in a fair and just manner
Ensuring that the management of natural resources in Indonesia is done more justly
Q6: What are the recommendations for the government and related parties in implementing the divestment process in the mining sector in Indonesia?
A6: The recommendations for the government and related parties in implementing the divestment process in the mining sector in Indonesia include:
Ensuring that the divestment process is carried out transparently and competitively
Ensuring that the price of the divested stock is fair and just
Ensuring that the divestment process is carried out in a fair and just manner
Ensuring that the management of natural resources in Indonesia is done more justly
Continuously reviewing and updating the regulations and policies related to the divestment process.
Q7: What are the future research directions for the divestment process in the mining sector in Indonesia?
A7: The future research directions for the divestment process in the mining sector in Indonesia include:
A study on the impact of the divestment process on the economy and community
A study on the effectiveness of the divestment process in increasing the control of shares by local investors
A study on the factors that affect the divestment process, including market value, industry average, and company's financial performance
A study on the divestment process in other sectors or countries.
Q8: What are the limitations of the study on the divestment process in the mining sector in Indonesia?
A8: The limitations of the study on the divestment process in the mining sector in Indonesia include:
The study is based on secondary data
The study only focuses on the procedures and mechanisms for determining divestment stock prices
The study does not consider other factors that may affect the divestment process
The study only considers the mining sector in Indonesia.
Q9: What are the implications of the study on the divestment process in the mining sector in Indonesia?
A9: The implications of the study on the divestment process in the mining sector in Indonesia include:
The study provides insights into the procedures and mechanisms for determining divestment stock prices
The study highlights the importance of ensuring that the divestment process is carried out transparently and competitively
The study emphasizes the need for the government and related parties to continuously review and update the regulations and policies related to the divestment process.
Q10: What are the conclusions of the study on the divestment process in the mining sector in Indonesia?
A10: The conclusions of the study on the divestment process in the mining sector in Indonesia include:
The divestment process in the mining sector in Indonesia is an important step in increasing the control of shares by local investors and ensuring that the management of natural resources in Indonesia is done more justly.
The procedures and mechanisms for determining divestment stock prices are critical in ensuring that the divestment process is carried out transparently and competitively.
The government and related parties must continuously review and update the regulations and policies related to the divestment process to ensure that the divestment process is carried out in a fair and just manner.