COAL shipping firm Manhattan Resources has completed the acquisition of a 92.18 per cent stake in Indonesian utilities firm PT Kariangau Power (PT KP), as part of a strategy to broaden its earning base and bring in new revenue streams.
The purchase consideration was adjusted from the initial US$37 million to US$35.7 million, due to an increase of over US$250,000 in PT KP's net current liability, said Manhattan Resources on Wednesday.
PT KP holds the licence to exclusively supply electricity within the Kawasan Industri Kariangau (KIK) zone, an integrated industrial zone for heavy and medium industries in Balikpapan, East Kalimantan, for 15 years from April 1, 2013. It currently owns a coal-fired power plant with two 15-megawatt units, with a utilisation rate of about 80 per cent.
The firm has two existing agreements with customers. The first is with coal terminal operator PT Dermaga Perkasapratama for a guaranteed monthly minimum sales, and the second is with an Indonesian state-owned electricity distribution company which is committed to buy all excess power not sold to other customers.
The first payment tranche of US$4 million has already been paid, while the balance will be paid by Sept 30. Funding will come from internal resources, cash generated from power plant operations and bank borrowings.
Said Manhattan Resources CEO David Low: "Moving into the energy-related business in Indonesia is a natural extension of our coal barging business, which will allow us to leverage the power generation experiences of some of our board members."