SINGAPORE (June 29): Manhattan Resources has completed the acquisition of a majority stake in PT Kariangau Power (PT KP) after obtaining shareholders’ approval at an Extraordinary Meeting held on Wednesday.

The acquisition was completed through SLM Holding, a wholly-owned subsidiary of Manhattan Resources, for US$35.7 million (S$48.2 million).

“This proposed acquisition of a 92.18% stake in PT KP is in line with the group’s strategy to add new revenue streams to broaden our earnings base, and will allow MRL to tap into the growing demand for electricity in Indonesia. In addition, the energy-related business is also an extension of our existing coal barging business,” says David Low, CEO & Managing Director of Manhattan Resources.

The purchase consideration will be funded by internal resources, cash generated from operations and bank borrowings.

PT KP was given the right by the Indonesian government to supply electricity exclusively within the Kawasan Industri Kariangau (KIK) zone for a period of 15 years from  April 1 2013.

Currently, PT KP owns and operates two 15W coal-fired steam power plants in the KIK zone in Balikpapan, East Kalimantan. Sited on a total area of about 40 hectares, the average utilisation rate of the power plant is about 80%.

PT KP has also entered into an agreement with an Indonesian state-owned company that distributes electricity in Indonesia, which has committed to purchase all the excess power that has not been sold to other customers.

In addition, PT KP’s power purchase agreement with coal terminal operator PT Dermaga Perkasapratama (DPP) also provides for minimum monthly guaranteed sales.

Manhattan Resources last traded at 10.9 Singapore cents.