KS Orka agrees to acquire Sokoria geothermal project

By Romel S. Gurky

ASX-listed Xped Limited announced Tuesday it has entered into a binding Conditional Sale and Purchase Agreement (CSPA) with Singapore-based KS Orka Renewables Pte Ltd for the latter to acquire the former?s geothermal project in Indonesia?s Flores Island.

Exped said in a statement that following completion of due diligence, Orka has agreed to acquire 95 percent shareholding of PT Sokoria Geothermal Indonesia (SGI) from Xped and its JV partner PT Bakrie Power.

Xped said it will divest its entire 45 percent shareholding in SGI and Bakrie will reduce its current shareholding in SGI from 53 percent down to 3 percent and remain a minority shareholder with Orka in the project development. Xped will receive consideration for the transfer in the nominal amount of US$1 and assignment of accounts payable by Xped under the terms of the CSPA. Xped will be entitled to an additional payment up to US$947,368 via payment commitment agreement between the parties.

The additional payment is payable to Xped within 30 days of the issuance of approval to the Notification of Intent to Develop the project (NOID) by Indonesia?s state electricity firm PT PLN which remains subject to approvals under the Power Purchase Agreement and finalizing tariff concession with PLN for the 30MW project. The amount of the additional payment (up to a maximum of US$947,368) will be determined by the finalized tariff and committed capacity.

Xped said to ensure the project is fast tracked through the process, Orka has committed immediate funding to SGI by providing loan of up to US$1.5 million for working capital to expedite the project and meet regulatory timelines. The loan must be repaid by SGI if completion of the purchase of Xped?s and Bakrie?s shares in SGI does not occur. The loan is secured by the shares in SGI held by Xped and Bakrie (by way of a limited recourse pledge).

Completion of the CSPA is subject to approval of PLN and BKPM (the Investment Coordinating Board of the Republic of Indonesia), the extension of the exploration period under the IPB held by SGI for one year, completion of the sale between Bakrie and KSO, all warranties remaining true and correct and there being no material adverse change in SGI. The sunset date for satisfaction of all conditions is 3 months after the execution date and failure to satisfy or waive all conditions by this date gives either party the right to terminate the CSPA, Xped said.

Xped said it has provided usual representations, warranties and indemnities in favor of KS Orka.

Editing by Reiner Simanjuntak