Trada Maritime to acquire coal businesses

By Tri Subhki R

IDX-listed shipping company PT Trada Maritime Tbk said it plans to acquire coal mining and related companies as part of business diversification strategy.

Trada said in a statement Tuesday it will acquire shares in coal mining company PT Gunung Bara Utama (GBU) and in IDX-listed PT SMR Utama Tbk. SMR owns mining services companies namely PT Ricobana Abadi and PT Delta Samudera.

?The company will synergize the current shipping business, particularly dry bulk transportation services, with coal mining and coal mining services companies,? Trada said.

GBU owns 5,350 ha coal concession with operation production mining permit (IUP-OP) in Melak, West Kutai Regency, East Kalimantan Province. It has 55.5 million tons of coal reserves. Meanwhile, SMR Utama is an indirect holding company of PT Delta Samudra, an IUP-OP holder of coal concession in West Kutai, East Kalimantan Province with 43.5 million of coal reserves.

The acquisition value of GBU and SMR Utama is approximately Rp5.59 trillion and Trada Maritime plans to have limited public offering and get credit facility from UOB Kay Hian Private Limited of as much as Rp6 trillion.

GBU only started exploiting its coal concession in 2015. ?By considering GBU?s coal reserves and market demand, it is expected that GBU will post positive cash flow and net profit in 2018,? Trada?s statement said.

GBU has a number of mining infrastructures among others 60 kilometers hauling road with total capacity 20 million tons per year, 60 hectare ROM stockpile with 1,500 ton per hour capacity conveyor, coal jetty and coal crusher with 5 million tons capacity per year.

Trada expects that the potential revenue from coal mining business is approximately US$250 million to $350 million per year with coal price assumption of up to $100 per ton in Newcastle Index. Trada also stated that GBU?s coal buyers are Glencore International AG and PT Anggun Makmur Energy.

Editing by Reiner Simanjuntak