Interra to sell granite quarry to Sanmas Mekar

By Romel S. Gurky

SGX-listed Interra Resources Limited said that its IDX-listed subsidiary PT Mitra Investindo Tbk (MITI) has entered into a conditional sale and purchase agreement (CSPA) dated November 16, 2015 with PT Sanmas Mekar Abadi (PT SMA), for the proposed disposal by MITI of granite quarry assets in Riau Islands.

Interra said in a statement Tuesday consideration for the proposed asset disposal comprises as follows.
a. Rp 39,000,000,000, which is equivalent to US$3,000,000 when converted at the exchange rate of US$1:Rp 13,000 as set out in the CSPA, for the granite quarry; and
b. a sum of US$530,502 being 70 percent of the accumulated balance amount paid by MITI into the environment restoration fund as at September 30, 2015, upon completion of the proposed disposal and subject to local authority approval, pursuant to the CSPA.

The granite quarry comprises the following:
a. the sale of all the equipment owned by MITI as described
b. the sale of all the land owned by MITI, and
c. the assignment and transfer of all the employment agreements entered into by MITI.

The consideration payable by PT SMA for the granite quarry is based on, interalia, the results of the valuation report prepared by Nirboyo Adiputro, Dewi Apriyanti & Rekan dated November 5, 2015 , which was commissioned by MITI, (the valuation report) and other factors.

Interra said upon the completion of the proposed disposal in accordance with the CSPA , the company will not own the granite quarry. ?The completion date of the proposed disposal shall be within three working days after the last of the conditions precedent set out in the CSPA is satisfied or waived, provided that completion shall not take place no later than February 29, 2016, unless otherwise mutually agreed by the parties,? the company said.

MITI?s only business before the injection of the Linda Sele fields into MITI, was its 100 percent interest in the mining business permit of the Bukit Piatu granite quarry located in Bukit Piatu, Kijang, Bintan, Riau Islands Province, Indonesia.

?As the core business of the company is in the oil and gas industry, it was always envisaged that MITI would dispose of the granite business after it became a subsidiary of the company,? Interra said.

Interra said it is keen to remove the granite business from its current portfolio through the sale of the granite quarry by MITI to PT SMA, because the granite quarry does not form part of the company?s strategic interest which remains in the oil and gas sector. Since becoming a subsidiary of the company, MITI has added to its portfolio of oil and gas assets and it has on June 26, 2015, entered into a subscription agreement to subscribe for one third of the total issued share capital in a company called Mentari Garung Energy Ltd, which holds the concession rights to the Garung Production Sharing Contract for the exploration and exploitation of an oil and gas concession in Kalimantan, Indonesia that is currently in the exploratory stage.

Editing by Reiner Simanjuntak