Geo Energy says that the proposed transaction, whose exact terms are to be determined, is value accretive and “transformational” as it enables the business to diversify into the “premium” hard coking coal segment while complementing its existing thermal coal energy portfolio.
In a bourse filing on Apr 1, Indonesian coal producer Geo Energy Resources is proposing to acquire a 50.61% stake in PT Mutiara Hitam Sukses (MHS), which owns PT Harfa Taruna Mandiri (HTM), a coking coal concession holder in Central Kalimantan, Indonesia.
The proposed acquisition will allow Mainboard-listed Geo Energy to tap the premium hard coking coal segment. The company highlights that at a selling price of US$220-US$250 ($280-$320) per tonne, HTM’s coking coal can command cash profit of US$110-US$140 per tonne. With estimated annual production at two million tonnes, the acquisition could potentially generate US$220-US$280 million in annual profit.
