Adaro buys 35% of S. Sumatra integrated coal mining services

IDX-listed firm PT Adaro Energy Tbk announced on Thursday that on October 10th, 2011 its subsidiary, PT Alam Tri Abadi (ATA), signed a deal to acquire a 35% interest in PT Servo Meda Sejahtera (SMS) for Rp200 billion (US$ 22 million) from PT Servo Infrastruktur (SI).

SMS provides integrated coal logistic services in South Sumatra. Via its subsidiary, SMS owns a dedicated haul road in South Sumatra and provides coal hauling services. Via another subsidiary, SMS owns a dedicated coal port on the east coast of South Sumatra and provides barge loading services

Post transaction, the ownership structure of SMS is 50% SI, 35% ATA and 15% PT Bumi Alam Sejahtera (BAS).

Adaro Energy carried out this transaction to support and develop its coal logistics operations in South Sumatra, the company said.

?Our investment in SMS is part of our strategy to replicate the proven success of Adaro Indonesia?s business model in South Kalimantan as we acquire and develop coal mining assets in South Sumatra. This deal brings us one step closer to owning and or controlling a vertically integrated coal supply chain in South Sumatra,? . Adaro Energy?s President Director, Garibaldi Thohir said.

Adaro Energy in August 2011 signed a share purchase agreement to acquire a 75 percent stake of South Sumatra coal mine PT Mustika Indah Permai from Elite Rich Investment Limited for $222.5 million. The transaction raised objection from state coal miner PT Bukit Asam Tbk (PTBA) as it considered the mine concession is located within its mining right area. (alex)