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Indonesia’s Param Mitra Coal Backdoor Listing in Singapore

Coal-fired Power Plant - Photo by Sainik-Aryan Group

JAKARTA (TheInsiderStories) – Indonesia’s Param Mitra Coal Resources (PMCR) has entered into sales and purchase agreement  with Singapore’s listed firm C&G Environmental Protection Holdings that will give the coal miner a backdoor listing on the Singapore Exchange (SGX). PMCR is owned by private Param Mitra Group.

In announcement at the SGX, C&G said will acquire PMCR shares and loans for S$400 million (US$536 million). Furthermore C&G will fully acquire PMCR’s assets which are focused on coal, mining, logistics and trading of thermal coal across the archipelago.

C&G will first undertake a 100-to-1 of shares at before issuing the new shares. Post consolidation C&G will issue new shares to PMCR about 488.88 million shares at S$0.008182 each based on the company;s current number shares.

Earlier, C&G had sold its entire stake in C&G Environmental Protection (Thailand) Company and C&G Environmental Protection International, turning it into a cash company.

PMCR is backed and managed by Sindhu Family who owns a leading India-based coal logistic and power player Sainik-Aryan Grup. Currently, Dev Sindhu is the CEO of PMCR.

The Sindhu family has nearly 25 years of experience in the coal mining, logistics and power generation business through its control of India’s largest coal beneficiation company, ACB India Ltd.

Singapore-registered PMCR established in 2011 and has invested over $50 million to develop the Indonesian coal assets and infrastructure and expand production. In 2014, PMCR has secured an investment of $7.5 million from Singapore private equity investor, Tembusu Partners Pte Ltd, out of the $20 million investment underwritten by The Islamic Bank of Asia.

The company focused on mining and trading of thermal coals sourced from two operating coal mines in East Kalimantan province of Indonesia. The miner holds 100 per cent of PMCR One, PMCR Two, and Dragon Power Investments. It also holds a 76 per cent stake in Unity Holding Business Singapore Pte. Ltd.

PMCR’s Kalimantan mines have a resource base of approximately 500 million metric tonnes (MT) and plans to ramp up production to approximately 5 million MT per year.

Leveraging on the fast-growing energy requirements across Asia and the management’s rich experience in the coal mining, logistics and power generation business, PMRC has secured off-take arrangements with Indonesian and Indian clients.

Coal industry players finds new optimism in the future coal business in the next few years, due to the rising coal price and strong demand from China and India. Optimism is the opposite of a year earlier when the business was hit by pessimism as the fossil energy price was weakening during 2011-2015.

Global coal prices are expected to remain healthy throughout 2018 after the coal price rose to around 34 per cent in 2017.  Indonesian coal benchmark also reached $96.47 per ton in the first five months this year, higher than last two-year average of $85.92 per ton in 2017 and $61.84 per ton in 2016, respectively.

The optimism comes from the strong demand from China that rose 9.3 per cent in the first four months of this year. It shows China will still rely on the coal even with the coal import restriction policy and commitment to shift to the clean energy. China’s coal imports recorded 9.3 per cent rise to 97.68 million ton in the first four months of 2018 (year on year).

Furthermore, the two-year low demand trend from India is expected to end this year. India would increase its coal imports amid soaring demand from its power generation.

The rebound demand prediction also supported by India’s imports that slightly rise in the first four months of 2018 to 60.4 million tonnes, a 3 per cent rise over 58.6 million in the first four months last year.

The price rise also drove the coal producer countries to boost production. Australia’s coal exports rise 3.8 per cent (week-to-week) to 7.1 million tons in the week ending May 7. It was the highest export record since mid-March 2018.

In addition, Indonesia’s coal production reached 28.07 million tons in the first two months of 2017, of which 15.6 million tons were absorbed by the domestic market.

US$1: S$1.34

Email: linda.silaen@theinsiderstories.com