PE-backed Merdeka buys stake in Indonesian gold mine

Minority shareholder Lion Selection Group said in a release the deal implied a value of A$39 million ($28 million) for its 33.3% stake. The cash transaction positions Pani to realize a number of permitting and licensing milestones before the end of the year.

Provident and Saratoga Capital bought a majority stake in Merdeka as part of an agreement to settle an ownership dispute in 2014. In 2016, the company received $25 million from Singapore’s Pierfront Capital to development its Tujuh Bukit project. Merkeda is expected to leverage this experience at Pani.

Technical work on Pani is accelerating following settlement in December 2017 of a long running ownership dispute. Lion, a mining-focused investor founded in 1997, said the project was shaping up as the best gold discovery it had ever been involved in. The site is said to be characterized by continuous mineralization with minimal overburden.

Indonesia has tracked a dwindling footprint of global mining conglomerates in recent years due to concerns around bureaucracy, regulatory changes and ownership disputes. For regional private equity players, much of the implied opportunity lies in picking up the best assets that strategics have left behind.

Provident is also active in Indonesia as a strategic partner to JD.com, which has substantial logistical infrastructure in the country. The GP’s other holdings across the region include internet and telecom towers.

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• Topics
• Southeast Asia
• Industrials
• Buyouts
• Indonesia
• Provident Capital
• Saratoga Capital Group
• Commodities