GMR Energy, a subsidiary of GMR Infrastructure through its overseas subsidiary, has entered into definitive agreement to acquire a 30% equity stake in PT Golden Energy Mines Tbk (GEMS), a Sinar Mas Group company in Indonesia.
GMR Group attaches great importance to this investment and sees it as a significant step in its endeavor to seek fuel security and also enhance its coal portfolio. As a part of the Transaction, GEL has entered into an off- take Agreement with GEMS, which entitles it to purchase coal over the next 25 years, with the annual off take quantity steadily increasing to 1,0 million tonnes over the coming years. The Transaction is subject to the fulfillment of several conditions precedent and is expected to close in CY 2011.
GEL will be paying cash consideration of $450-$550 million for the transaction, funded through a combination of debt and internal accruals. The acquisition will be made through an offshore special purpose vehicle (SPV) domiciled in Singapore.
GMR infrastructure’s business activities involve development of various infrastructure projects in power, airport and SEZ segments. The company reported a net profit of Rs 24.49 crore for the quarter ended June 30, 2011 as compared to a net loss of Rs 6.96 crore for the corresponding quarter last year.