Sinar Mas Group, an Indonesia-based conglomerate, is working on a deal to list its Indonesian coal assets on the Singapore Exchange by swapping shares with a small forestry firm that is already listed on the stock market, reports Reuters. The reverse takeover would enable Sinar Mas Group to more easily raise capital for expansion.
The Singapore-listed company United Fiber System Ltd said on Friday it has signed a $1.2 billion agreement with PT Dian Swastatika Sentosa Tbk, an Indonesian coal mining company. Reuters explains:
Under the agreement, United Fiber will swap 92.8 percent of its enlarged share capital for a 67 percent stake in Golden Energy Mines Tbk, the holding company of several coal-mining firms in Indonesia. The 67 percent stake in Golden Energy is currently owned by Dian Swastatika.
Golden Energy is held by Widjaja family, which controls the Sinar Mar empire. Sinar Mas has interests in a range of businesses, including coal mining companies, Golden Agri Resources, a palm oil producer, and Asia Pulp & Paper (APP), a pulp and paper supplier. APP has struggled to raise money following its default on billions of dollars of debt in the early 2000s.
Indonesia’s coal mining sector is especially hot right now, with companies pouring billions into extraction of coal reserves in Borneo and Sumatra. The debt swap would ease capital-raising for Sinar Mas Group’s coal companies at a time when the sector is growing fast and has won an exemption from Indonesia’s moratorium on new forestry concessions.
“Most companies list in Singapore because it gives them access to the capital market, and if the market is keen enough on the sector, it’s quite easy for them to add on assets,” Carey Wong, commodities analyst at OCBC Investment Research in Singapore, told Reuters. “There are a lot of unlisted private coal mines in Indonesia that could be added on. Indonesia is sitting on a pretty rich vein of coal.”
Although it doesn’t rank among the world’s top ten in coal reserves, Indonesia was the fifth largest coal producer in 2009 following China, the U.S., Australia and India. It is the largest exporter of thermal coal.
SOURCE: Harry Suhartono. Sinar Mas eyes backdoor listing in Singapore with $1.2 bln deal Reuters Jan 26, 2012.
(10/28/2011) Royal Golden Eagle, the parent Indonesia-based conglomerate for pulp and paper producer APRIL and palm oil giant Asian Agri Group, is looking to raise $200 million for expansion, reports Debtwire.
(05/05/2011) Efforts to slow deforestation in Indonesia should include curtailing further expansion of forestry holdings by giant conglomerates, says an Indonesian activist group. Analyzing data from the Ministry of Forest’s Production Forest Utilization Quarterly Report, Jakarta-based Greenomics-Indonesia found that seven conglomerates in Indonesia control more than 9 million hectares of land, including large forest concessions that will likely be exempt from any moratorium on forest clearing established under the country’s Reducing Emissions from Deforestation and Degradation (REDD) program. The extent of holdings could complicate Indonesia’s efforts to reduce emissions from logging and plantation development.
(02/16/2011) Environmentalists, scientists, and locals have won the battle against a controversial coal plant in the Malaysian state of Sabah in northern Borneo. The State and Federal government announced today that they would “pursue other alternative sources of energy, namely gas, to meet Sabah’s power supply needs.” Proposed for an undeveloped beach on the north-eastern coast of Borneo, critics said the coal plant would have threatened the Coral Triangle, one of the world’s most biodiverse marine ecosystems, and Tabin Wildlife Reserve, home to Critically Endangered Sumatran rhinos and Bornean orangutans. Local fishermen feared that discharges from the plant would have imperiled their livelihood.
(01/13/2011) Over the past several years, Asia Pulp & Paper has engaged in a marketing campaign to represent its operations in Sumatra as socially and environmentally sustainable. APP and its agents maintain that industrial pulp and paper production — as practiced in Sumatra — does not result in deforestation, is carbon neutral, helps protect wildlife, and alleviates poverty. While a series of analyses and reports have shown most of these assertions to be false, the final claim has largely not been contested. But is conversion of lowland rainforests for pulp and paper really in Indonesia’s best economic interest?
(02/01/2011) Hundreds of mining and oil palm plantation companies are operating illegally in Indonesian Borneo, according to a investigation by an task force set up by President Susilo Bambang Yudhoyono.
(09/01/2010) Morgan Stanley, CIMB Securities, and Credit Suisse will underwrite the initial public offering of PT Borneo Lumbung Energi (Borneo Energy), a company that owns Asmin Koalindo Tuhup, a mining company that operates in Central Kalimantan in Indonesia Borneo, reports ANTARA.
(07/25/2007) Coal mining in Borneo imperils the island’s fast-disappearing forests and threatens to undermine the effectiveness of an monumental conservation initiative, according to a report from the The Sunday Times and Parliamentary testimony.