Manhattan seeks to acquire at least 51% interest in Kariangau Power

By Romel S. Gurky

SGX-listed Manhattan Resources Limited (MRL or the group) announced Monday that it has signed a non-binding memorandum of understanding (MOU) with Energy Resource Investment Pte. Ltd. (ERI) to acquire a majority stake of at least 51 percent shares in PT Kariangau Power (KP).

KP owns and operates a coal-fired steam power plant in the Kariangau industry area of Balikpapan, East Kalimantan.

The proposed acquisition is expected to allow the group to tap into the opportunities arising from the rising demand for electricity in Indonesia, especially in eastern Indonesia where demand is forecasted to grow at 11.2 percent per annum.

PT Perusahaan Listrik Negara (PLN), the state-owned enterprise of Indonesia that supplies public electricity, is targeting to increase Indonesia?s electrification ratio from 83 percent in 2014 to 98 percent by 2022. In East Kalimantan alone, projected production is expected to more than double to 6,702 GWh from 2014 to 2022.

MRL believes that the signing of the MOU is another step in the diversification efforts to build a stable earning base, and will present an opportunity for the group to leverage on the rising demand for electricity in Indonesia and the electrification plans of Indonesia as the country heads towards further industrialization.

The terms of the proposed acquisition set out in the MOU and all other rights and obligations of such transaction are subject to the execution and delivery of the definitive agreements to be negotiated and mutually agreed to by MRL and ERI.

Editing by Johannes Simbolon