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GMR Energy Ltd, GMR Group's flagship company for energy investments, will acquire a 30 per cent equity stake in PT Golden Energy Mines Tbk, a Sinar Mas Group company in Indonesia, for $550 million.
The acquisition will be made through an offshore special purpose vehicle (SPV) domiciled in Singapore, the company said in a press statement.
Mr B V N Rao, Business Chairman, GMR Energy said: “The acquisition will provide fuel security for our power plants under construction, and also support further capacity addition and trading.”
GMR Energy has entered into an off-take agreement with PT Golden Energy Mines which entitles it to purchase coal over the next 25 years, with the annual off-take quantity steadily increasing to 10 million tonnes over the coming years. The transaction is subject to the fulfilment of several conditions and is expected to close by the end of 2011, the press statement said.
Mr. Raaj Kumar, Chief Executive Officer, GMR Energy, said in the press statement, that “given PT Golden Energy Mines' coal reserves of over 860 million tonnes and coal resources of 1.9 billion tonnes, the off-take agreement will give GMR Energy access to the required quality of coal from one of the lowest cost producers in Indonesia.”
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