Sep 8, 2011

GMR buys 30% stake in Golden Mines

Power plant producer and coal miner PT Dian Swastatika Sentosa Tbk (DSSA), that is led by Indonesian businessman Fuganto Widjaja, today announces a 30% share sale in a wholly owned subsidiary dubbed PT Golden Energy Mines Tbk (GEMS) to Indian publicly listed firm GMR Energy Ltd.
A conditional share sale and purchase agreement has been signed by Dian Swastatika and GMR Infrastructure Investments (Singapore) Pte Ltd, a wholly owned subsidiary of GMR Energy on August 11 2011. Dian Swastatika, controlled by Sinarmas Group, expects to capitalize strategic value of Golden Mines, increase shareholders value, and accelerate business expansion.
Under the agreement, Dian Swastatika has agreed to dispose 1.76 billion shares in Golden Mines or representing 30% of its capital-paid up. Golden Mines also plans hold an initial public offering at Indonesia Stock Exchange. 
In late May, Golden Mines aims to offload 10%-20% shares to the public via initial public offering (IPO) within the range price of Rp2,300-Rp3,500 after the miner seizes a strategic investor. 
"The take over price will refer to the final result of book building during the Golden Mines' IPO," said Dian Swastatika in an official prospectus published today.
Previously, GMR Infrastructure announced that it had planned to buy 30% stake in Golden Mines at US$550 million on August 8 in a bid to secure the coal supply.
Referring to the previous statement, GMR Infrastructure might acquire 30% stake in Golden Mines at US$0.31 a share or Rp2,655 a share.
GMR Infrastructure will finance the acquisition with a combination of debt and internally generated cash flow. GMR Infrastructure expects to secure a 25-year coal supply of 10 million tons annually from Golden Mines, previously named PT Bumi Kencana Eka Sakti.
The shares transfer will be conducted after several conditions are fulfilled such as the IPO of Golden Mines, listing at Indonesia Stock Exchange, and obtaining approvals. 
The closing is expected to occur during 135 days or in the third week of December after the agreement has been signed on August 11. GMR Energy is adviced by Nomura Holdings Inc.
Dian Swastatika is 59.90% owned by PT Sinar Mas Tunggal, which is controlled by Fuganto Widjaja, son of Indonesian tycoon Indra Widjaja, and public shareholders hold the remaining stake. 
Golden Mines was founded in 1997 with 99.99% shareholding owned by DSSA. As of March 2011, Golden Mines' assets were US$126.48 million, which is the largest assets of Dian Swastatika.
Dian Swastatika is also controlling shareholder in coal miner PT Borneo Indobara with 99.07% ownershio. Borneo's total asset was US$43.49 million in 1Q 2011.
Dian Swastatika, parent of coal miner PT Golden Energy Mines, reported a 511.73% jump in net profit for the first quarter of this year as a result of higher revenue. 
Golden Mines owns and manages 10 coal concessions on 57,000 hectares in Jambi and Riau, Sumatra, with total resources of 172 million tons. Coal production capacity is 10 million tons in 2011 and will be jacked-up to 15 million tons in 2014.
Dian Swastatika has several subsidiaries focusing on coal mining such as PT Borneo Indobara, PT Kuansing Inti Makmur, PT Manggala Alam Lestari, PT Nusantara Indah Lestari, PT Wahana Alam Lestari, PT Bara Kencana Sakti, PT Bara Harmonis Batang Asam, PT Kencana Cemerlang Persada, PT Tanjung Belit Bara Utama, PT Berkat Nusantara Permai, PT Nusa Indah Permai, and PT Bungp Bara Utama.

Disclosure: No position at the stock mentioned above.
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