- 51% stakes targeted in Trans Maritim Pratama and Bahari Segara Maritim
- Acquisition to diversify revenue into logistics and infrastructure
- Companies bring a decade of tugboat and barge management expertise
Indonesian coal producer Geo Energy (RE4 0%) is looking to acquire a 51 per cent stake in two Indonesian shipping companies for a cool US$127.5 million. This strategic move is all about enhancing their business model, branching out into logistics and infrastructure services, and boosting their asset base to pave the way for future earnings, reports Business Times.
Target Companies and Expertise
The acquisition targets Trans Maritim Pratama and Bahari Segara Maritim, both of which are experts in commodity logistics for coal and other non-mining products in Indonesia. With nearly ten years of experience under their belts, these companies have honed their skills in building and managing tugboats and barges.
Supporting Coal Mine and Jetty Operations
Geo Energy believes that the strengths of these two firms will bolster production at the Triaryani coal mine and streamline operations at the Marga Bara Jaya jetty. This will enhance the reliability of coal deliveries while also cutting down on transportation costs.
Fleet Strength and Capacity
Combined, these two shipping companies boast a fleet of 54 vessels, 27 tugboats and 27 barges, some of which are set to be operational by FY2025. The barges vary in size from 270 to 330 feet, with transport capacities ranging from 5,000 to 10,000 tonnes.
Transaction Structure
The proposed US$127.5 million consideration will be structured as:
- US$23.5 million cash payment
- US$18 million receivables assignment
- 275 million Geo Energy ordinary shares worth around US$86 million, issued at S$0.40 per share, a 13% premium above the three-month VWAP of S$0.35.
As the deal qualifies as a major transaction, shareholder approval will be sought at an extraordinary general meeting.
Company Background
Founded in 2008, Geo Energy is a major Indonesian energy group focused on low-cost coal production. The company was listed on the Singapore Exchange mainboard in 2012. Shares of Geo Energy closed flat on Wednesday at S$0.38.
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Source: Business Times
