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INDONESIAN coal mining group Golden Energy and Resources (GEAR) is planning to acquire a coal concession for US$65.6 million in total, as part of its plans to increase its coal reserves and production levels.
The group's 67 per cent-owned subsidiary PT Golden Energy Mines Tbk (Gems) on May 12 entered into a conditional sales-and-purchase agreement with GMR Energy (Netherlands) BV and GMR Infrastructure (Overseas) Ltd to acquire sale shares in four companies for US$59.3 million, and mandatory convertible bonds for another US$6.4 million.
The sale shares comprise varying stakes in PT Barasentosa Lestari (BSL), PT Unsoco (UNS) and PT Duta Sarana Intermusa (DSI) and PT Dwikarya Sejati Utama (DSU).
BSL, the primary target, holds a mining concession in South Sumatra; it has estimated coal resources of 393 million tonnes and reserves of 194.6 million tonnes in one of its two blocks. The coal concession area was valued at US$258.5 million as at April 1 this year, based on independent qualified persons reports.
The acquisition would increase GEAR's quantity of high calorific value coal resources available for production, it said. The deal will be paid for using internal resources, it added.
The proposed acquisition constitutes an "interested person transaction" as the GMR vendors share the same ultimate holding parent as GMR Coal Resources Pte Ltd which owns 30 per cent of PT Gems.