Raharja Energi Cepu (RATU) Plans to Acquire SMS Development Ltd
PT Raharja Energi Cepu Tbk (RATU) has announced that, through its business entity PT Raharja Energi Madura (REM), it will acquire all shares of SMS Development Ltd and a 20% stake owned by SMS Development Limited in Husky-CNOOC Madura Limited.
According to disclosures to the Indonesia Stock Exchange (BEI), the acquisition transaction is being conducted through the signing of a novation agreement and a Share Sale and Purchase Agreement.
Under the novation agreement, PT REM acts as the new lender, taking over the rights and obligations of the former creditor, SMS Offshore Overseas Limited, regarding a loan to SMS Development Limited. The value of the novation object amounts to US$59.2 million.
“This loan was previously provided by SMS Offshore Overseas Limited to SMS Development Limited. That value becomes the price for the transfer of the loan paid by the new lender to the former lender,” RATU’s management stated, as quoted on Thursday (7 May 2026).
The payment is made by PT REM to the former creditor, and once effective, all rights and obligations under the loan agreement transfer to PT REM.
The loan was previously non-interest bearing and, in economic substance, categorised as quasi-equity because it was used for the acquisition of a 20% stake in Husky-CNOOC Madura Limited (HCML) as well as cash call payments.
In addition, the company plans to adjust the interest rate after obtaining shareholder approval, based on arm’s length principles. A simulation of 5% annual interest is estimated to generate an interest expense of around US$2.96 million in SMSD, but this will be eliminated in consolidated reporting, thus having no impact on consolidated net profit.
Besides the loan novation, PT REM has also signed a Conditional Share Sale and Purchase Agreement (PPJB) to acquire 100% of the shares of SMS Development Limited from SMS Offshore Overseas Limited. The main transaction value is recorded at US$62.51 million.
It is noted that the company had previously paid an initial deposit of US$12.5 million on 25 December 2025. The transaction also includes a contingent payment scheme. SMS Development Limited could receive an additional payment of US$16.5 million if the Production Sharing Contract (PSC) extension is obtained, plus a US$3 million bonus if the PSC extension occurs before 30 June 2027.
SMS Development Limited itself is an investment company that holds a shareholding in HCML, a company engaged in the exploration and production of crude oil and natural gas in the Madura Strait under a PSC with SKK Migas.
Thus, the total value of the planned transaction overall, including the acquisition, contingent payments, and loan novation, amounts to US$141,219,164.
In the transaction, OCP Asia Fund IV and OCP Asia Fund V act as the new lenders as well as the economic beneficiaries of the transaction results. The funds from the share transfer payment by PT REM to SMS Offshore Overseas Limited are principally used to settle obligations to these two funds.
As part of the transaction mechanism, OCP Asia Fund IV and V will also issue a deed of release, including the release of certain obligations and the discharge of share pledges. However, the issuance of this document is still awaiting the fulfilment of several conditions precedent before the transaction closing.
The company also disclosed an additional letter dated 26 December 2025 between the company and PT Petro Indo Pasifik (PT PIP). This letter regulates the sharing of economic responsibilities for PT REM’s obligations under the PPJB.
Under this scheme, the Company bears 45% and PT PIP 55% of any claims that may arise related to the buyer’s obligations.
Furthermore, an additional letter dated 17 March 2026 regulates the sharing of responsibilities for guarantees to creditors in connection with the planned acquisition financing. Under this agreement, the Company bears 51% of the obligations while PT PIP bears 49%.
The company states that the total maximum exposure from corporate guarantees and cash deficit guarantees is estimated to reach US$78.19 million. Nevertheless, the economic exposure is deemed to have been mitigated through risk sharing with PT PIP and a measured risk profile.
The company also assesses that its consolidated equity capacity of US$56.6 million as of the end of 2025 is sufficient to absorb the potential exposure without disrupting business continuity.
To realise this corporate action, the company is holding an Extraordinary General Meeting of Shareholders today, 7 May 2026.