PTBA seeks new loans to increase stake in railway project

State coal mining company PT Tambang Batubara Bukit Asam Tbk (PTBA) is seeking to obtain US$272 million in new loans to increase its ownership in PT Bukit Asam Transpacific Railway (BATR).

PTBA president director Sukrisno said the company planned to acquire another 20 percent of the joint venture?s stake from majority shareholder Rajawali Corporation in order to increase the company?s ownership to 30 percent.

At present, Rajawali owns 80 percent in the joint venture, with PTBA and China Railway Engineering Corporation (CREC) holding 10 percent, respectively.

Sukrisno said that PTBA would need to spend US$320 million to acquire the additional 20 percent stake in the joint venture. ?About $272 million will be financed by bank loans,? he said.

The joint venture will build a 308-km railway connecting PTBA?s coal mine in Bangko Tengah, South Sumatra to the Tarahan coal terminal in Lampung. The joint venture will need up to $1.65 billion in investment for the railroad project which will be used to transport PTBA?s coal to the coal terminal.

The project is expected to start construction at the early 2011 at the latest. The railway is scheduled to start operation in mid or end of 2014 and will be able to transport 25 million tons of PTBA?s coal per year. (*)