(Photo: Robert Budi Hartono)
JAKARTA (TheInsiderStories) - As Indonesians are debating over Freeport shares divestment, two Indonesian conglomerates, Djarum and Wilmar International, have silently entered gold mining business by buying Martabe gold mine in West Sumatera.
The two conglomerates, EMR Capital of Australia and US-based private capital Farallon, have inked deal to buy 95 percent of G-Resources shares in PT Agincourt Resources, the operator of gold miner Martabe. The buyers have agreed to acquire the shares as well as the liabilities of G-Resources at a combined value of US$775 million.
The buyers agreed to buy Agincourt Resources through TopCo and Subco. The two entities are 61.4 percent owned by EMR Capital, 20.6 percent owned by funds and accounts managed by Farallon, 11 percent owned by an investment holding vehicle ultimately controlled by Martua Sitorus, owner of Wilmar International Group and 7 percent owned by an investment holding vehicle ultimately controlled by members of the family of Robert Budi Hartono and Michael Bambang Hartono.
Acting as the sellers are Top Gala, ARS, while the sellers are SubCo and TopCo.
In an announcement, G-Resources said that the parties have conditionally agreed that, among others, (i) SubCo will acquire the Company Shares from the Seller; (ii) the Buyer will acquire the FinCo Shares from Top Gala; (iii) the Buyer will acquire the Assigned FinCo Loan from G-Resources; and (iv) the Buyer will accept a novation of all the Seller’s obligations and liabilities under the ARS Loan from the Seller.
The Initial Purchase Price consists of (i) the FinCo Shares Consideration of approximately US$307,000,000, (ii) the FinCo Loan Consideration of approximately US$94,200,000 and (iii) the Company Purchase Price of approximately US$373,800,000. These transactions resulted in a total purchase of US$775 million.
The Martabe Mine is located in North Sumatra, Indonesia. The ownership and operation of the Martabe Mine is pursuant to the CoW entered into in April 1997, which defines all of the terms, conditions and obligations of both PT Agincourt Resources and the Government of Indonesia for the life of the contract of works (CoW).
G-Resources said the buyer, TopCo, SubCo and their ultimate beneficial owners are third parties independent of the G-Resources Group and its Connected Persons.
G-Resources said the company Directors routinely review the overall business strategy and operations of G-Resources Group in order to maximize value for the Shareholders. While the Mining Business has continued to achieve positive financial results for the six months ended 30 June 2015, and financial year ended 31 December 2013 and 2014, as set out in G-Resources’ interim report and annual reports in respect of such periods, it has been observed by the Directors that the significant volatility and downward movement in spot gold prices in recent months has directly affected the profitability of the Mining Business.
“Therefore, the Directors believe that it is an opportune time and in the best interest of the Shareholders to dispose of the Disposal Group on the terms of the Sale and Purchase Agreement and pursue a diversification strategy in order to broaden its revenue base and achieve more consistent returns for its Shareholders,” it said. (*)