Space Con signs HoA to acquire Sokoria geothermal project

By Romel S. Gurky

ASX-listed Raya Group and its Indonesian JV partner Bakrie Power have entered into a Heads of Agreement (HoA) with with Australia-based Space Con Pty Ltd for the sale and purchase of the Sokoria Geothermal Project in Indonesia.

Raya said in a statement Friday that Space Con and their partners are currently undertaking due diligence during January 2015 to finalise their intention under the agreement.

At the termination of the due diligence period the parties upon SpaceCon?s satisfaction will enter into a Sale and Purchase Agreement (SPA) for the Sokoria Geothermal Project whereby SpaceCon agrees to purchase 85 percent equity in Sokoria Geothermal Indonesia (SGI), the statement explained.

In October of last year, SGI signed a power purchase agreement (PPA) for the 30 MW Sokoria geothermal power plant project on FLores Island with state owned electricity firm PLN. SGI is 45 percent owned by Raya, while the majority is owned by Bakrie Power.

Elsewhere, the Raya statement said SpaceCon will pay a deposit of US$$250,000 into an agreed escrow account as per terms and conditions stipulated in HoA whilst all parties await PLN decision and acceptance of sponsor and shareholder amendment to the PPA.

Upon PLN?s approval SpaceCon will pay the following:
? US$2,000,000 (less deposit $250,000) to current shareholders Raya and Bakrie for their current equity holdings in Sokoria Geothermal Indonesia (?SGI?). Raya will receive US$918,000 and retain a 6% free carry holding in the project.
? US$1,000,000 deposit into SGI Company account for project development and working capital.
? US$87,600 to PLN for Security Performance bank guarantee.

Editing by Reiner Simanjuntak