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Geo Energy completes acquisition of 58.65% stake in Golden Eagle Energy, and 33% stake in Marga Bara Jaya

Nicole Lim
·2-min read

“This will unlock the group’s value and generate long-term sustainable returns to our shareholders,” says GEO's CEO Melati.

Geo Energy Resources has completed the acquisition of 58.65% stake in Golden Eagle Energy (GEE), an Indonesian coal mining group listed on the Indonesia Stock Exchange, and 33% stake in Marga Bara Jaya (MBJ) with ready-for-development infrastructure.

Following the completion of the acquisition, the group will submit filings to the Indonesian Financial Services Authority within three business days and launch the Mandatory Tender Offer (MTO) upon approval.

The price of the MTO is IDR1,305.50 (11 cents) per share and is expected to be completed within the next ten to 12 weeks. If the MTO is approved, Geo Energy’s equity stake in GEE could rise to 75%, and the total consideration for the MTO to rise to US$200 million.

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The CEO and executive chairman of Geo Energy, Charles Antonny Melati, says that the US$220 million loan facilities from Bank Mandiri and the group’s strong cash reserves will allow them to fund the mining and infrastructure development required to support and achieve the Triaryani mine’s targeted production volume of 25 million tonnes annually.

“This will unlock the group’s value and generate long-term sustainable returns to our shareholders,” he adds. “Even without including the valuation of the integrated infrastructure, the Triaryani asset alone has been valued at almost US$1 billion as set out in the independent valuation report.”

As coal remains the primary and cheapest source of electricity, Melati says that the demand for coal continues to grow.

“The future of thermal coal is expected to shift towards a calorific value of 4,000 gross As received (GAR) with low ash and low sulfur characteristics. Triaryani’s significant coal reserves of such characteristics will allow Geo Energy to establish its dominance in this market segment.  We believe that with the successful execution of our plans, Geo Energy’s value will continue to rise toward realising our vision of bringing Geo Energy into a billion-dollar business,” he says.

Shares in Geo Energy closed flat at 28 cents on Oct 18.

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