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UT prepares to buy two more coal mines
PT United Tractor, the publicly listed heavy equipment distributor and coal mining company, was on track Friday to finalize acquisition of two coal mines in Central Kalimantan for around US$45 million, says an executive
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PT United Tractor, the publicly listed heavy equipment distributor and coal mining company, was on track Friday to finalize acquisition of two coal mines in Central Kalimantan for around US$45 million, says an executive.
"We are now completing the due diligence process, hopefully we can announce the acquisitions by next month or January next year," said finance director Gidion Hasan.
Gidion, however, refused to mention the name of the companies he was dealing with as the due diligence process was still underway.
The coal mines in question, according to Gideon, met the company's strategic plan criteria only to acquire mines which had more than 5 million tons of reserves of medium to higher quality coal, with more than 5,800 kcal/kg (calories per kilogram) calorific value.
"We have $45 million on standby to wrap up the deal."
Currently, the company operates a coal mine in South Kalimantan with annual production of three millions tons of coal under its subsidiary PT Pamapersada Nusantara, which has 13 million tons of reserves and contributed Rp 2.8 trillion ($233 million) in sales during the January-September period.
Its other coal mine, located in Kapuas, Central Kalimantan, has 40 million tons of reserves of coal and is expected to start production in 2009.
In the first nine months of 2008, United Tractors generated Rp 21.1 trillion in sales revenue, up by 59.4 percent from 13.2 trillion from the same period last year.
It managed to book Rp 2.1 trillion in net profits, an 88.7 percent increase from last year.
The mining sector is expected to bolster the company's revenue after forecasting that construction machinery sales would probably decrease significantly.
"Next year our sales should be backed up from other sectors, like mining and the parts and services business," Gidion said.
The company's sales revenue in the first nine months of 2009 was made up from sales of construction machinery (47.6 percent), mining contracting (39.2 percent) and coal mining (13.2 percent)
United Tractors is 59.5 percent owned by PT Astra International with the investing public controlling the rest. (hwa)
