Straits seals major deal with PTT

INDONESIAN coal producer Straits Resources has clinched a deal to sell a 60% stake of subsidiary Straits Bulk & Industrial to Asian energy major PTT Group for up to $US335 million.
Straits seals major deal with PTT Straits seals major deal with PTT Straits seals major deal with PTT Straits seals major deal with PTT Straits seals major deal with PTT

Typical Callide test on coal combustibility.

Blair Price

Having gone into a trading halt yesterday, an official signing ceremony will be held today in Singapore to recognise a strategic co-investment alliance between the two companies.

Straits said it had received the up-front cash completion payment of $220 million from PTT, with the rest expected this calendar year.

“The remaining performance payment of up to $115 million relates to certain matters in connection with reserve upgrades in relation to the mine located on Sebuku Island, South Kalimantan, Indonesia,” Straits said.

With the new cash, Straits has taken the opportunity to repay the full $A45 million of its debt facility, provided by ANZ and Macquarie Bank.

Straits reaffirmed it expected to pay one-fifth of the $US335 million asset sale to shareholders.

Martin Purvis has stepped down from his role as Straits director and been appointed as chief executive officer of SBI.

SBI holds a 47.1% stake in Singapore-listed Straits Asia Resources and coal exploration interests in Bruni and Madagascar.

Straits Asia Resources produced 2.04 million tonnes of thermal coal from its Sebuku and Jambayan mines in Indonesia during the December quarter.

The December quarterly report also revealed the total production and sales of Straits’ Indonesian operations reached 8.6Mt for last year.

The production target for this calendar year is in the range of 9-11Mt.

Straits will transfer the Yannarie solar salt project in Western Australia to SBI as part of the transaction.

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