State-owned coal miner PT Bukit Asam (PTBA) announced Friday that it had taken over almost the entire stake in a joint venture (JV) that it created with PT Rajawali Asia Resources, part of the Rajawali Group.
In an announcement published on the Indonesia Stock Exchange (IDX), Bukit Asam corporate secretary Joko Pramono said that both companies had finished revising the ownership structure of PT Bukit Asam Banko (BAB).
BAB is their joint venture that was created in 2008 and will be responsible for managing mining operations in Banko Tengah, Muara Enim regency, South Sulawesi.
According to the statement, the restructuring was completed on April 6 and Bukit Asam now controls a 99.99 percent stake in BAB, up from 65 percent. Rajawali Asia, on the other hand, owns only a 0.01 percent stake, down from 35 percent.
Bukit Asam attributes the change to a series of government regulations on mineral and coal mining activities that have made the companies’ previous authorization agreement obsolete.
The regulations allow transfer of mining rights to occur as long as the rights recipient is wholly owned by the company that holds the original mining operation permit (IUP).
In the case of Banko Tengah, Bukit Asam holds the IUP, meaning that BAB can only receive the rights if it is wholly owned by Bukit Asam.
Joko said that it purchased the additional 34.99 percent stake — equal to 3,368 shares — from Rajawali Asia at the original price, which was Rp 250,000 (US$19.4) apiece, bringing the total transaction value to Rp 842 million.
The remaining 0.01 percent stake — equal to one share — will continue to be held by Rajawali Asia, at least until Sept. 8, 2016, when there is certainty regarding the financing of Banko Tengah’s railway construction.
As previously reported, both the mining and railway works in Banko Tengah are part of one integrated project that was initiated more than six years ago.
While the mining part is handled by BAB, the railway part is managed by PT Bukit Asam Transpacific Railways (BATR), which is a joint venture between Bukit Asam, PT Transpacific Railway Infrastructure — another company under the Rajawali Group — and China Railway Group Limited.
However, the project has been delayed several times due to various issues, including BAB’s ownership structure and BATR’s financing.
“If BATR fails to reach financial closure for the railway works according to the deadline, Bukit Asam is entitled to purchase the remaining 1 percent share in BAB that is owned by Rajawali Asia,” Joko told The Jakarta Post in a telephone interview.
“However, if it succeeds in securing the necessary funding, Rajawali Asia can buy back its shares in BAB for $49 million,” he added.
Funding for the railway works is estimated to cost $2 billion. The railway itself, spanning around 280 kilometers, will be used to transport BAB’s coal production.
It will also expand the existing railroad, connecting Bukit Asam’s coal mine in Tanjung Enim, South Sumatra, and its Tarahan coal terminal in Lampung.
Meanwhile, Bukit Asam president director Milawarma said during a recent shareholders’ meeting that the company was upbeat about booking 33 percent growth to 23.9 million tons in coal sales volume in 2015, supported by the operation of its new railway and port.
The double-track railway will connect Tanjung Enim and Prabumulih in South Sumatra, while the port will serve Bukit Asam’s operations in Tarahan.
Last year, Bukit Asam sold 18 million tons of coal and booked Rp 13.08 trillion in revenue.
Source: The Jakarta post
