GMR Infra to buy 30% stake in Indonesian coal asset
GMR Infrastructure said on Friday its unit GMR Energy Ltd has entered into a pact to acquire a 30% stake in Indonesia's PT Golden Energy Mines Tbk or GEMS, for USD 450-550 million in cash, joining the line of Indian firms buying coal assets across the globe to seek fuel security.
August 12, 2011 / 19:06 IST
GMR Infrastructure said on Friday its unit GMR Energy Ltd has entered into a pact to acquire a 30% stake in Indonesia's PT Golden Energy Mines Tbk or GEMS, for USD 450-550 million in cash, joining the line of Indian firms buying coal assets across the globe to seek fuel security.
Shares of GMR Infrastructure rose as much as 3.5% during early trades.GEMS is a Sinar Mas Group company, GMR Infrastructure said in a statement to the stock exchange.As part of the deal, which is expected to close in calendar year 2011, GMR Energy Ltd has entered into an off-take agreement with Golden Energy, a unit of Dian Swastatika Sentosa, to buy coal over the next 25 years starting Jan 1, 2012.The annual off take will steadily increase to 10 million tonnes per annum over the coming years, it said.GMR, with interests in airports, energy and highways, will fund the buy via a combination of debt and internal accruals, it said.The buy will "significantly enhance the fuel security of the power plants under construction and development by GMR Energy Ltd. as also provide a coal portfolio for trading activity," the company said.Indian firms have rushed to find coal mine assets in Indonesia, South Africa and Australia to fill the growing gulf between domestic coal output and demand.In May, three sources told Reuters that Coal India, the world's largest coal miner, was in advanced talks to buy up to 40% stake in Golden Energy Mines for up to USD 1 billion. GVK Power and Infrastructure, which has been scouting for coal mines for the past two years to fuel its power plants, was also in advanced talks to buy a coal mine owned by Australia's Hancock Prospecting. At 10:00 am (0430 GMT) shares of GMR Infrastructure were trading at Rs 30.60, up 2.51% in a firm Mumbai market. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
