GMR Infrastructure buys indonesian company, secures coal supplies for its subsidiary

GMR Energy, a part of the GMR infrastructure, will acquire 30% stake in the Indonesian firm PT Golden Energy for $550 million in cash. With this transaction the company's coal asset portfolio will be enhanced.

The payment will be made in cash and it will be funded through a combination of debt and internal accruals, stated GMR Infrastructure in its regulatory filing to the BSE.

The company, GMR, has also signed a coal offtake agreement with the indonesian firm. This entitles it to lift coal for 25 years, starting January 2012. The annual offtake quantity will steadily increase to 10 million tonnes over the coming years.

This acquisition will be completed through a special purpose vehicle (SPV) of GMR Energy. The SPV will be based in Singapore and the transaction should be completed by the end of the year.

B V N Rao, GMR Energy Business Chairman, said on the occasion, "The acquisition of a significant stake by GMR Energy in PT Golden Energy Mines is a key milestone in the growth of GMR"s energy business. It will provide fuel security for our power plants under construction and also support further capacity addition and trading."

The alliance will significantly enhance the fuel security of the power plants under construction and development by GMR Energy and also provide a coal.

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