ABM Investama’s subsidiary secures India contract

PT Reswara Minergi Hartama, a subsidiary of publicly listed integrated energy solution provider PT ABM Investama, has secured a contract to sell 2 million tons of coal to India this year.

Reswara obtained the contract through an agreement between its subsidiary, PT Tunas Inti Abadi, and India-based Subham Corporation Pvt. Ltd., which became one of six coal traders holding licenses to supply coal to Indian electricity company the Thermal Power Corporation (NPTC).

Reswara will obtain up to US$108 million as the contract approved sales of coal with calories of 5,400 to 5,600 of air dried basis (ADB) at $50 to $54 per ton.

Reswara said that the price would be examined every three months in accordance with the market coal price.

“We are satisfied with Reswara’s achievement at the beginning of 2012. The agreement made us able to accomplish 45 percent of Tunas Inti Abadi’s target of 4.5 million tons in sales this year. Moreover, the contract also gives a competitive price, higher than the average price of coal, with 5,400 to 5,600 in calories,” Reswara president director Harry Asmar said in a written statement.

ABM Investama president director Andi Djajanegara said that the contract obtained by Tunas Inti Abadi had provided access to NPTC.

“The term of the deal is one year, but we hope to see the relationship continue,” Andi said.

He added that the sales deal was in line with his company’s plan to encourage the performance and business expansion of Reswara.

“This good news motivates us and other subsidiaries to give a maximum contribution to our stakeholders, especially to our clients, shareholders and investors,” Andi said.

ABM Investama, which is controlled by the Hamami family whose father, Achmad Hamami, is named as one of the richest men in Indonesia, floated its shares on the Indonesia Stock Exchange (IDX) on Dec. 6, 2011, gaining up to Rp 2.1 trillion (US$ 233 million).

The company allocated about Rp 600 million to Tiara Marga Trakindo (TMT) as a divestment of shares in ABM Investama to the public. ABM Investama channeled the remaining Rp 1.5 trillion to pay loans, finance expansion of its business units and support working capital.

The company recently announced that it paid its loans amounting to $37.5 million, which consisted of $13 million to Singapore’s DBS Bank and Rp 225 billion to Bank Permata.

ABM Investama currently has 11 subsidiaries grouped under five business units, coal production, mining contractor and power solutions that are supported by engineering services and integrated logistics services.

Reswara, which is one of ABM Investama’s main business pillars, has more than 550 million tons of coal resources. Currently, Reswara holds four mining business licenses for areas in South Kalimantan and Nanggroe Aceh Darussalam.

Reswara coal production is supported by Tunas Inti Abadi, which has exclusive mining rights in Tanah Bumbu, South Kalimantan. Tunas Inti Abadi produces low grade coal. (rcf)