PHI Group signs definitive agreement to acquire coal asset in RI
Thursday, January 3 2013 - 11:04 AM WIB
PHI Group Inc, a company focused on energy and natural resources, recently announced it has signed a definitive agreement to acquire 70% of equity ownership in PT Tambang Sekarsa Adadaya in exchange for cash and stock.
According to the agreement, PHI Group will pay a total of 5,250,000 in PHI Group common stock and 5,250,000 in cash to TSA, which owns a 9,690-hectare coal concession purportedly with 71,038,925 tons measured and 205,334,343 tons indicated coal resources in West Sulawesi, Indonesia. Both parties expect to close the contemplated transaction in the latter part of March 2013.
Specifications from laboratory analysis of coal samples at this concession revealed that the coal has Gross Calorific Value of 6,278 Kcal/Kg (ADB); Total Moisture of 6.0 % (ARB); Inherent moisture of 3.4 % (ADB); Ash of 17.1 % (ADB); Total sulfur of 0. 87 % (ADB); Volatile matter of 34.1 % (ADB); Fixed carbon of 45.4 % (ADB).
FOB/MV price of this coal grade is approximately US$75 per ton. The company intends to set the production level at 3 million tons per year by the second year of full operation.
"This transaction is part of PHI Group's plan to accumulate a sizable portfolio of coal assets to respond to the increasing demand for coal in the Asia-Pacific region.
Annual world coal demand is expected to grow from 7.6 billion tons in 2011 to 8.9 billion tons in 2016 and more than 85% of global demand growth will come from China and India .
New coal-fueled generation of 395 GW is expected by 2016. In 2011, total global coal exports amounted to 1,040 million tons, of which Indonesia accounted for 319 million tons and Australia 281 million tons.
Other countries in Asia Pacific all need to import coal to generate electricity. For example, by 2017, Vietnam will need to import 24 million tons and Malaysia 29.7 million tons per year. As Japan shuts down 50 nuclear power plants by 2040, it will need to rely more on natural gas, coal and renewables to fill that gap," the company said.
Henry Fahman, Chairman of PHI Group, said that the company is currently working with professional teams to conduct the independent due diligence requirements for the closing of this transaction.
Editing by Er Audy Zandri