Indika teams up with Chinese power giant Huadian: Source

PT Indika Inti Corporindo, a less-known company which is stunning the coal industry with its current aggressive efforts to acquire stakes in several top coal companies of the country, is backed up by Chinese power giant China Huadian Group, according to sources.

The local firm, which, according to sources, is controlled by Henry Pribadi, the nephew of tycoon Sudono Salim, has bought a 60 percent stake in East Kalimantan-based coal miner Berau Coal and is eying a 36 percent stake in Kideco Jaya Agung, also based in East Kalimantan. Berau produces around 8 million tons annually, while Kideco?s annual coal output is about 14 million tons.

Sources said Indika?s buying spree aims to secure coal supplies for a power plant to be built by Huadian in western part of Java.

According to its website, China Huadian Corporation, a state-owned company, operates 116 power plants in China with a combined power generation capacity of 31,090 MW. Last year, its subsidiary China Huadian Engineering Company voiced interest to build a power plant in Java.

Meanwhile, Jeffrey Mulyono, president of Berau Coal, said on Thursday that Indika had made a down payment for the purchase of the 60 percent stake in Berau from PT United Tractors.

He did not provide details on the price of the shares, but Bisnis Indonesia said the 60 percent stake is valued at US$75 million.

Jeffrey noted that the acquisition of the stake was ?not yet final? as United was obliged to offer the existing shareholders to buy the stake at the same price under the pre-emptive right scheme. The existing shareholders ? local firm PT Armadian Tritunggal (30 percent) and Japanese firm Nisshio Iwai (10 percent) ? have 30 days to decide whether to accept the offer. Should they refuse to exercise their pre-emptive rights within the period, the deal between Indika and United will become effective.

United has agreed to sell its shares in Berau to Indika as part of its bid to repay its debts to creditors. (Alex)