Siwani Trimitra takes over pipeline transmission project from L&M Group
Wednesday, December 20 2000 - 02:00 PM WIB
PT Siwani Trimitra has taken over a $56m worth contract to construct and develop fuel oil transmission pipeline system and a number of fuel oil depots oil in Indonesia from Singapore-based L&M Group Investments Ltd.
Edward Seky Soeryadjaya controls major stakes in both companies. Siwani Trimitra, formerly PT Mandiri Intifinance, is an investment bank listed on the Jakarta Stock Exchange. Meanwhile, L&M Group Investments is an engineering and specialized contractor company listed on Singapore Stock Exchange.
Through the deal, Siwani Trimitra has acquired L&M Group's entire value of work in progress in the pipeline and tank-farm projects in "Surabaya Depot Satelit", "Pipanisasi BBM Manggis Sanggaran" and "Kuala Tanjung Transit Terminal", granted by state-owned oil and gas company Pertamina.
The contract transfer agreement was signed on October 27, 2000.
L&M obtained the rights to construct those projects by purchasing it from judicial manager which was appointed creditors of Van Der Horst Ltd. The purchase was made through an open auction and been legalized by Singapore's court.
The pipeline projects were suspended by Pertamina in 1998. VDH subsidiary companies -- Infrastructure Technology International (L) Inc., Van Der Horst Technologies Pte Ltd and PT VDH Teguh Sakti -- have so far incurred approximately $24m in work in progress in the pipeline projects, excluding the "Depot Satelit A Jakarta" project in Jakarta.
The work in progress has been fully provided for by the VDH subsidiaries. L&M is the ultimate controlling shareholder of the four VDH subsidiaries which were previously acquired for S$11m.
In this regard, Siwani Trimitra will seek private placement from some strategic investors by shareholder rights offering to help finance the project. In this regard, Siwani Trimitra has obtained shareholders' approval to issue 720m common shares during an extra-ordinary meeting of shareholders held in last March.
Recent shortages of fuel in Jakarta and elsewhere in Indonesia have dramatically increased the strategic need to have additional fuel distribution facilities as well as back up storage and distribution facilities to Pertamina's existing facilities throughout the country.
In its report to the Singapore Stock Exchange, L&M Group said that the pipeline projects had a total construction value of $380m, of which $56m has been incurred to date. The entire $56m work-in-progress had been previously provided for in 1999 by Van Der Horst Ltd.
L&M Group also said that the pipeline projects were awarded to the respective licensees under build and rent contracts which are currently under review by Pertamina. Under these contracts the licensees were expected to receive revenue streams of approximately $840m over a 10-year contractual period (*)