Eksploitasi obtains funding from Sinar Mas

By Thomas Sembiring

Amid financing difficulties due to the current drop in coal price, IDX-listed coal mining firm PT Eksploitasi Energi Indonesia Tbk has obtained funds from the Sinar Mas Group that would allow it to increase coal volume shipment to state-owned electricity firm PT PLN.

Eksploitasi Director Novriaty Hilda Sibuea said Tuesday that Sinar Mas has actually pledged the funding support since late last year, but it was only realized this year.

Eksploitasi has a contract to supply 3.4 million tons of coal per year to PLN. But it has been facing difficulties in meeting the contractual volume due to working capital difficulties amid the current coal market downturn.

Last year, for instance, the company was only able to ship about 613,000 tons of coal to PLN, added Wim Andrian, Corporate Secretary and Head of Investor Relations Eksploitasi.

He added that the extra financing support from Sinar Mas would allow the company to deliver 55 barges of coal per month to PLN.

Despite a Rp 320 billion loan facility from Bank BII, and Rp 670 billion from BRI, Eksploitasi still needs the extra support from Sinar Mas as it takes a relatively long time for PLN to make payment, Wim said.

The well diversified Sinar Mas Group has been quite aggressive in acquiring coal assets lately, taking advantage of cheaper valuation. It has announced plans to acquire LSE-listed Asia Resource Minerals (which controls IDX-listed coal giant PT Berau Coal Energy), and will provide financing support for the acquisition of ASX-listed coking coal giant Cokal Ltd by IDX-listed PT Cakra Mineral Tbk.

Elsewhere, Wim said the company?s 2x7 MW Pangkalan Bun coal-fired power plant in West Waringin, Central Kalimantan, has obtained a total of 60,000 tons of coal from the company as per end of June. ?About 10,000 tons or two barges each month,? he said.

Editing by Reiner Simanjuntak