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ingapore’s mining-focused investment firm Redstone Resources Pte. Ltd. has acquired a majority stake in plantation-turned-mining and trading company PT Citra Kebun Raya Agri (CKRA) in a Rp 1.11 trillion (US$121.21 million) deal.

Expecting to “secure” iron ore supply, Redstone Resources has taken over a 65 percent stake in CKRA, or 4.05 billion shares, previously owned by Citra Group Pte. Ltd. at Rp 275 apiece on April 2 — the same price CKRA shares traded during the week — in the negotiation market, CKRA said on Monday.

Citra Group did not disclose what the proceeds would be allocated for.

CKRA shifted its core business into mining and trading late last year after announcing a Rp 500 million acquisition of an 88 percent stake in PT Persada Indo Tambang (PIT), which owns a 2,936-hectare iron-ore mine in West Sumatra with a potential capacity of 8,000 metric tons per month and 45,000 metric tons per month by 2017.

Redstone Resources’ sole owner, Hong Kong business tycoon Kwok Wai Chor Valentine, is one of PIT’s iron ore buyers.

“CKRA’s share purchase transaction with PIT has indirect relations with Redstone’s takeover of CKRA,” CKRA said in a statement signed by its director Yudhi Asmara Yasmine.

“The purpose of CKRA shares purchase by Redstone is to secure iron ore supply produced by PIT’s mine for controlling shareholders [Redstone].”

PIT previously delivered most of its iron ore productions to China, Yudhi has said.

The government has seen indications that its plan to completely ban exports of mineral resources and raw material by 2014 may pose risks exploitation during the transition period, Industry Minister M.S.
Hidayat has said.

Redstone Resources is among several Singaporean firms that have realized investment in Indonesia after DBS Holdings Group’s took over Indonesia’s sixth-largest lender, Bank Danamon (BDMN), and Tiger Airways Holdings’ acquisition of PT Mandala Airlines, among others.

“Redstone Resources will conduct mandatory tender offers to buy the remaining CKRA shares, which will be executed with a price offer of Rp 275 per share,” CKRA said in a stock exchange filing. The tender offer will be conducted from May 3 to June 1 this year.

Redstone Resources will have to spend an additional Rp 278.13 billion if CKRA’s minority shareholders’ release all their shares in the tender offer. PT Kurnia Cemerlang owns a 12.12 percent stake in CKRA, while the public holds the remaining 7.88 percent.

Indonesia has attracted almost $19.5 billion in foreign direct investment, of which more than $5.1 billion, or over 26 percent, came from Singapore — lifting overall direct investment performance in Southeast Asia’s top economy.

CKRA booked Rp 8.66 billion net profit in the first nine months of last year, after suffering a net loss of Rp 41 billion in the same period of the previous year. Its revenue from sales stood at Rp 131.89 million during the period after zero sales in the previous year.

The company booked higher net profits than revenue earned because it enjoyed nonoperational income of Rp 13.24 billion, a surge from Rp 619 million in the first nine months of 2010.

The company, however, expected to earn an additional Rp 382.5 billion in revenue from divestment of its subsidiary, PT Horizon Agro Industry, which CKRA sold for Rp 750 billion in November last year.

Established in 1990, CKRA was originally engaged in housing development and building, particularly for low and middle-income families, according to its website.

Indonesia Stock Exchange (IDX) data shows shares in CKRA, which went public in 1999, have been suspended from trading since March last year, standing at Rp 275 apiece ever since.