KSDR, CAIN sign Heads of Agreement

By Ruli Setiawan

PT KS Drilling Ltd (KSDR) and PT Citra Agramasinti Nusantara (CAIN) signed on Thursday (November 15th of 2012) a legally-binding Heads of Agreement (HoA) on their joint venture PT KS Drilling Indonesia (KSDRI or the JVC).

Based on the HoA, the JVC and its subsidiaries (the JVC Group) shall carry on the business of buying, selling, owning and chartering of onshore and offshore rigs and and associated equipment;

The JVC Group shall only tender for projects in Indonesia that require certain local content requirements and not compete with the company and its subsidiaries (the KS Group) in tendering for the same projects in Indonesia.

KSDR and PT CAIN may provide funding, whether by internal or external means, in accordance with the terms of the HoA, to the JVC Group, if the shareholders of the JVC so determine in good faith and after due commercial considerations that it shall be in the best interests of the JVC Group to do so, provided that the approvals of both KSDR and PT CAIN are obtained.

KSDR is an 80-percent-owned subsidiary of the Singapore-listed KS Energy Limited, which announced early last month that PT KSDRI was incorporated with PT CAIN as a joint venture.

KSDRI is incorporated in Indonesia with an initial issued and paid up capital of US$1 million divided into one million shares at US$1 per share.

KSDR and PT CAIN had subscribed for 490,000 (49 percent) and 510,000 (51 percent) shares respectively in the initial issued and paid up capital of PT KSDRI at a subscription price of US$1 per share. With the subscription in PT KSDRI by KSDR, PT KSDRI became a 49 pecent associate of KSDR.

Editing by Benget Besalicto Tnb