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GMR Infrastructure is close to acquiring PT Barasentosa Lestari coal mine in Indonesia for over $100 million. GMR is lining up debt financing for the acquisition providing it with access to coal assets located on Kalimantan Island.

Barasentosa, with 115 million tonne reserve, produces moderate-to-high quality coal and was previously owned by Banpu Public Company and Salim Group. The deal is expected to be announced shortly. Since Indonesia’s regulations prohibit direct foreign ownership of coal mines, the deal structure is bound to be complex with GMR picking up stake in an indirect holding company.

Bangalore-based GMR group is scripting a strong presence in the domestic and international power sector. The group is currently bidding for several coal and hydel power projects locally. It has 420 MW power generation capacity in Tamil Nadu with two projects. Earlier this year, it acquired 50% stake in InterGen for $1.1 billion giving it direct interest in 8,000 MW power generation facilities worldwide.

The Barasentosa buy will be GMR’s biggest mining acquisition till date. Earlier, it had acquired a small stake in a South African mining company with the option of increasing the stake subsequently. Coal assets are politically sensitive in Indonesia’s politically-charged climate, especially in Kalimantan that has witnessed ethnic violence in the past. crackcrack

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97.36 0.49 (0.51%)
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