In its second major big ticket acquisition overseas, the Rs 35,000-crore Adani Group?s flagship company Adani Enterprises (AEL) on Wednesday inked $1.65-billion deal with the Indonesian government and its mining company PT Bukit Asam for setting up rail and port infrastructure project in the island nation for sourcing coal to India.
?As per the agreement, we will be investing $1.65 billion in building infrastructure, which includes port and railway lines in South Sumatra province of Indonesia,? AEL?s CFO Devang Desai said. The company’s Indonesian endeavour would be funded at a debt and equity ratio of 70:30. The equity portion would come from the Adani Enterprises and the Indonesian subsidiary and debt is yet to be tied up.
Shortly after acquiring Australian company’s Linc Eneregy’s coal assets in Queensland, Devang Desai told FE that the company was on the verge of another mega deal in Indonesia.
Adani Enterprises, through its step-down Indonesian subsidiary, PT Adani Global, has entered into a binding tripartite agreement for setting up a dedicated ?rail and port project? with the government of Sumatra Selatan, Indonesia, and PT Bukit Asam, a government of Indonesia Coal Mining Company. PT Bukit Asam is one of the leading producers of Coal in Indonesia, and owns second largest coal reserves in Indonesia. This project provides ?Coal Purchase Rights? to Adani and the infrastructure created will be used for transportation of a minimum volume of 35 million metric tonnes per annum (mmtpa) of coal on a ?take or pay? basis from PT Bukit Asam concessions in South Sumatra.
The project is estimated to cost $1.65 billion and will be constructed within 48 months. The povernment of South Sumatra has undertaken to provide and facilitate all permits/approvals and arrange for land for rail and port project.
Adani has a large Coal mining setup in East Kalimanthan and the present initiative in Sumatra will further strengthen its Coal sourcing reach from Indonesia. It has recently acquired 100% interest in one of the largest Coal tenement in Australia too. The Coal from its Indonesian and Australian sources would support and enable the rapid expansion of its Power and Coal businesses.