Indika obtains shareholders approval to acquire Kideco

IDX-listed PT Indika Energy Tbk said an extraordinary shareholders meeting on Wednesday has approved its plan to acquire additional 45 percent shares in East Kalimantan coal miner PT Kideco Jaya Agung, the country's third largest coal miner.

Indika said in a statement that the shareholders have also approved the company's plan to raise up to US$600 million via debt notes or bonds to help finance the Kideco acquisition, and for Indika to provide corporate guarantee tor the debts.

Together with its wholly-owned subsidiary PT Indika Inti Corpindo, the two have entered into separate Share Purchase Agreements with each of Samtan Co., Ltd. and PT Muji Inti Utama, respectively, to purchase 40 percent of coal firm PT Kideco Jaya Agung from Samtan and 5 percent of Kideco from Muji for an aggregate total consideration of US$677.5 million, of which $517.5 million to be paid upon closing of the transacton, and another $160 million plus maximum interest rate of 10.5 percent per year once Kideco obtains extension of its current coal contract of work.

Indika said that following the acquisition, it will control 91 percent shares of Kideco, which produces low sulphur and low ash coal, while Samtan will retain a 9 percent stake.

Indika Energy said previously it has built an integrated business portfolio in energy resources, services, and infrastructure. "With its substantial coal reserves, resources, and operational excellence, Kideco will continue to serve as Indika Energy's sustainable growth foundation. This transaction will further strengthen Indika Energy's position in the energy business value chain," said Arsjad Rasjid, President Director and Group CEO of Indika Energy, in the statement.

Editing by Reiner Simanjuntak