PT Delta Dunia Makmur Tbk has announced that its subsidiary, PT Bukit Makmur Mandiri Utama (BUMA), through its newly incorporated Australian subsidiary, BUMA International Pty Ltd, owned 90% by BUMA and 10% by AGDM Investments Pty Ltd, has entered into a conditional agreement with Downer EDI Ltd to acquire Downer’s coal mining contractor business currently referred to as Open Cut Mining East business in Australia (conditional agreement).
The conditional agreement defines a transaction that entails transfer of Mining East’s assets, employees, employee entitlements, and contracts from Downer to BUMA International (transaction). Completion of the transaction, subject to the fulfilment of customary conditions that include, among others, novation of certain contracts, is expected to occur before the end of 2021. Considering the drawdown of Mandiri loan facility in July 2021, BUMA is fully funded to complete this transaction.
Downer will receive approximately AUS$150 million in cash proceeds from the transaction, subject to completion adjustments. BUMA has paid Downer a deposit of AUS$16 million with the remainder of the purchase price payable at completion.
The Mining East business comes with an experienced and highly successful management team in Australia that will supplement capabilities of BUMA and DOID group. The Mining East business has an aggregated production capacity of approximately 160 million billion m3/y of overburden removal, of which ~130 million billion m3/y is contracted, and approximately 10.5 million t of coal, providing services for both thermal and metallurgical coal concessions. The existing portfolio includes four Queensland-based sites owned by world-class customers. In the recent years, Mining East recorded an annual average revenue of approximately AUS$510 million. Mining East is also pursuing a number of new projects that would facilitate its future growth.
The success of the transaction shall mark BUMA’s entry into coking coal that serves as the first step towards diversification, and expansion beyond Indonesia. It will provide BUMA and the DOID Group with the ability to tap into future mining opportunities in Indonesia as well as Australia. The transaction shall be value accretive and will enhance our access to future growth opportunities.
The CEO of Downer, Grant Fenn, said the sale of Open Cut Mining East is the final step in Downer’s divestment of its Mining portfolio of businesses. Together with the previously announced Mining and Laundries transactions, total proceeds from Downer’s divestment programme amount to AUS$778 million.
“An important part of our Urban Services strategy was the exit from our capital-intensive Mining businesses,” Fenn said. “The sale of Open Cut Mining East is the last step of this process and follows the divestments of Open Cut Mining West, Downer Blasting Services, Underground mining, Otraco, the Snowden consulting business and our share in the RTL Mining and Earthworks joint venture.”
Read the article online at: https://www.worldcoal.com/coal/14102021/buma-signs-conditional-agreement-for-downer-edis-open-cut-mining-east-business/
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