Indonesians acquire New Hope's local assets

Fabiola Desy Unidjaja, The Jakarta Post, Jakarta

Four Indonesian businessmen are in the process of acquiring Australian-based New Hope Corp.'s assets in Indonesia, including the largest coal mine in the country.

Edwin Soeryadjaya, T.P. Rachmat, Benny Subianto and Garibaldi Boy Thohir are acquiring a 41 percent stake, worth US$378 million, in Adaro mine in South Kalimantan.

Singaporean-based Temasek Holding Pte. and Parallon are the financial supporters of the deal.

"We reached a conditional sales and purchase agreement with New Hope last week. We expect the whole deal to be completed in April," Boy told The Jakarta Post on Tuesday.

"This is a large-scale shares purchase. There are a few issues that need to be settled but we hope to sign the deal in April."

He said that with the finalization of the deal, the coal mine would be controlled by Indonesian company of PT Dianlia Sepymukti, which already owns 51 percent of Adaro.

Dianlia is controlled by Edwin and Benny. Edwin is the son of the founder of the country's largest carmaker PT Astra International, William Soeryadjaya.

Boy emphasized that the purchase of New Hope's assets had nothing to do with Astra, as each party was acting on its own behalf.

Bloomberg reported that chairman Robert Millner said New Hope might use the funds to double its coal output at its New Acland mine in Queensland or return the cash to investors.

New Hope is selling its Indonesian assets after prices for power station coal rose to a record last year as China cut exports to meet domestic demand. Adaro accounted for 88 percent of New Hope's output last year.

"The price seems to be about right," said Clyde Henderson, a director at Sydney-based research company Energy Economics Pte., as quoted by Bloomberg.

Indonesia plans to build several power stations between 2006 and 2008 that may require as much as 15 million tons of coal annually, said New Hope's Robertson.

"The domestic focus is important and we believe its best handled by our domestic partners," he said. "The price is also right. We've got other possibilities in Australia, but we're still be looking for other opportunities in Indonesia."

Temasek, a Singapore state-owned investment company, and Noonday Asset Management are providing the equity financing and arranging debt for the buyers, New Hope said.

Adaro is the country's biggest source of thermal coal, with the operation producing some 28 million tons per year.

Some of the largest coal mining companies operating in Indonesia include the Kaltim Prima Coal and Bumi Resources, both in East Kalimantan.