SINGAPORE: Indonesia's Sinar Mas Group is orchestrating a backdoor listing of its Indonesian coal assets in Singapore through a $1.2 billion share-swap with a small forestry firm listed on the Singapore Exchange, a move that will give it access to more funds.
United Fiber System Ltd said on Friday it had struck a S$1.5 billion agreement with Indonesian coal miner PT Dian Swastatika Sentosa Tbk to help it focus on its coal-mining business.
Under the agreement, United Fiber will swap 92.8 percent of its enlarged share capital for a 67 percent stake in Golden Energy Mines Tbk, the holding company of several coal-mining firms in Indonesia. The 67 percent stake in Golden Energy is currently owned by Dian Swastatika.
United Fiber shares, valued at $76 million, soared as much as 71 percent and Golden Energy, which has a market value of $1.7 billion and is part of conglomerate Sinar Mas, edged up 1.0 percent.
"Most companies list in Singapore because it gives them access to the capital market, and if the market is keen enough on the sector, it's quite easy for them to add on assets," said Carey Wong, commodities analyst at OCBC Investment Research in Singapore.
"There are a lot of unlisted private coal mines in Indonesia that could be added on. Indonesia is sitting on a pretty rich vein of coal."
Golden Energy is controlled by Indonesia's Widjaja family via its listed unit Dian Swastatika and raised about $245 million in Indonesia's biggest coal IPO last year.
Sinar Mas Group is one of Indonesia's largest conglomerates with interests in pulp and paper.
"The board is of the view that the proposed acquisition and resultant refocusing of the company on coal mining is appropriate given the growth opportunities that they offer," United Fiber said in a statement.
India's GMR Infrastructure, which holds 30 percent in Golden Energy, will be offered the opportunity to sell some or all its shares to United Fiber, the statement said.
Golden Energy will become a subsidiary of United Fiber after the completion of the deal, the Singapore company said. It said it will try and remain listed on the Singapore exchange.
United Fiber has appointed DMG & Partners Securities Pte Ltd as the financial adviser.
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