[SINGAPORE] Indonesian coal producer Geo Energy is proposing to acquire 51 per cent stakes in two Indonesian shipping companies for a US$127.5 million consideration.
The proposed acquisition will complement its business model, diversify its revenue stream towards logistics and infrastructure services, as well as enlarge its asset base to enable future earnings contributions, the company said on Wednesday (Aug 27).
The two shipping companies are Trans Maritim Pratama and Bahari Segara Maritim. They specialise in logistics for commodities, including coal and other non-mining products in Indonesia.
Geo Energy said that the companies have nearly a decade of proven experience in building and managing tugboats and barges.
Their capabilities will support Geo Energy’s growing production at the Triaryani coal mine, as well as its operations at the Marga Bara Jaya jetty. This will enhance delivery reliability for coal offtake and lower transportation costs, the group said.
Trans Maritim Pratama and Bahari Segara Maritim own 54 vessels, comprising 27 tugboats and 27 barges. These figures include vessels expected to be delivered and operational in FY2025.
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The vessels are between 270 and 330 feet, with transport capacities ranging from 5,000 to 10,000 tonnes, respectively.
The transaction’s US$127.5 million consideration includes a cash payment of US$23.5 million and an assignment of receivables amounting to around US$18 million.
It also includes an issuance of some 275 million ordinary shares of Geo Energy, worth around US$86 million, at a share issuance price of S$0.40 a share – which is a 13 per cent premium above the three-month volume weighted average price of S$0.35 per share.
As the proposed acquisition is considered a major transaction, the company said it would seek shareholders’ approval for it at its extraordinary general meeting.
Established in 2008, Geo Energy is a major energy group in Indonesia that focuses on low-cost production of coal assets. The company was listed on the mainboard of the Singapore Exchange in 2012.
Shares of Geo Energy closed on Wednesday flat at S$0.38.
