GMR Energy takes 30% stake in Indonesian coal mine

T Golden Energy Mines, which is owned by Sinar Mas Group, has coal reserves of more than 860 million metric tons and coal resources of 1.9 billion metric tons, according to GMR. "The off-take agreement will give GMR Energy access to the required quality of coal from one of the lowest cost producers in Indonesia," Raaj Kumar, CEO GMR Energy, said in a statement.

The acquisition will be funded through a combination of debt and internal accruals made through an offshore special purpose vehicle in Singapore. This transaction is expected to close later this year.

GMR Energy currently has four power plants in operation and a 13 under various stages of construction. The company wants to boost its capacity to 12,000 megawatts in 5-6 years and 65% of this will be coal-based, The Economic Times reported.

The Indonesian coal sector and Indian power sector are popular among private equity investors. Northstar Pacific Partners bought 40% of Delta Dunia for $350 million, which in turn acquired Buma, Indonesia's second-largest mining contractor, in 2010. The Singapore Government Investment Corp. (GIC) and TPG invested $400 million in Northstar's acquisition vehicle.

Last month, Blackstone was closing in on its third deal India power deal in 15 months, with total expenditure already reaching $500 million. According to reports, the firm has signed a definitive agreement to pay $111 million for a 25.2% stake in Visa Power, the power generation arm of Kolkata-based conglomerate Visa Group.

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• Topics
• Industrials
• Southeast Asia
• South Asia
• TPG Capital
• GIC Private
• The Blackstone Group