Australia?s Straits Resources to form coal alliance with Thailand?s PTT

Australian listed mining company Straits Resources Limited announced Monday that it had entered into a strategic alliance with Thailand?s state owned energy firm PTT Public Company Limited, by selling of a 60 percent interest in its wholly owned subsidiary, Straits Bulk and Industrial Pty Ltd (SBI), to the latter for up to US$335 million in cash.

SBI is the holding company for SRL?s Brunei coal exploration interests, Madagascar coal exploration interests and for SRL?s 47.1 percent shareholding in the SGX listed Indonesian coal company, Straits Asia Resources Limited (SAR).

The total cash consideration of up to $335 million comprises an upfront completion payment of $220 million and a performance payment of up to $115 million payable post completion.

According to the statement, the performance payment relates to certain matters in connection with reserve upgrades in relation to the mine located on Sebuku Island, South Kalimantan, controlled and operated by SAR.

As part of the deal, SRL and PTT will enter into a Co-Investment Shareholders Agreement which will govern the operation of SBI going forward.

The Share Sale and Purchase Agreement has been executed and completion is expected to take place in April 2009, the statement said. (robert)