Geo Energy gets term sheet for infrastructure unit at US$1.5 billion valuation

[SINGAPORE] Coal producer Geo Energy Resources has entered into a term sheet with Resource Invest (ResInvest) for an investment in its infrastructure unit, Marga Bara Jaya (MBJ), at a US$1.5 billion valuation.

Under the terms, the Swiss-based private commodities investment company intends to invest directly through MBJ shares or indirectly through MBJ’s parent company by acquiring existing shares or issuing new ones. The companies are targeting an initial investment in Q3 2026, with the remainder in Q1 2027.

The proposed deal is subject to definitive agreements, which will finalise the investment amount and percentage holding. The transaction also relies on the entry into a new marketing joint venture between Geo Energy and ResInvest Commodities (RIC).

RIC is a subsidiary of ResInvest and already serves as the coal offtaker for Geo Energy’s Triaryani coal mine.

MBJ operates a road and jetty infrastructure business in South Sumatera that handles coal logistics for domestic and export markets. The project has reached an almost 90 per cent construction milestone and is on track for completion by June or July 2026.

At its full operational capacity of about 50 million tonnes of haulage a year, the MBJ integrated infrastructure is targeted to generate up to an additional US$300 million in annual earnings before interest, taxes, depreciation and amortisation for Geo Energy within a few years.

The infrastructure will allow the group to increase Triaryani’s coal production to between 20 million and 25 million tonnes a year while yielding logistical savings.

Geo Energy stated that the US$1.5 billion valuation for the MBJ asset alone indicates that the company’s share price remains largely undervalued. It expects the entry valuation to re-rate its total valuation.

ResInvest currently holds a 5.36 per cent shareholding interest in Geo Energy. The broader ResInvest group operates six coal-fired assets across Germany, Poland and the Netherlands.

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Shares of Geo Energy fell 3.2 per cent or S$0.02 to close at S$0.61 on Friday.