Tenaga Receives Offer For Coal Mining Asset

Tuesday, August 15th 2006

Tenaga Nasional Bhd has received proposals from several major Indonesian companies to buy its 92.5 percent equity interest in TNB Coal International Ltd, sources said.

PT Adaro, Indonesia’s largest coal producer, and PT Pamapersada Nusantara (PAMA) had submitted proposals to acquire the stake from Tenaga, Malaysia’s largest utility company, the sources told Bernama today.

PT Adaro is proposing to use its unit, Padang Karunia, to purchase the mining stake in TNB Coal from Tenaga.

Under the proposal, Padang Karunia will make an upfront payment of US$5.50 million (US1=RM3.67) and a deferred payment of US$18.25 million on a staggered basis.

Padang Karunia is valuing TNB Coal’s mining asset at US$23.75 million.

Meanwhile, PAMA, a mining contractor for PT Dasa Eka Jasatama (DEJ), is proposing to acquire TNB Coal by way of writing off Tenaga’s investments and advances into DEJ, totalling US$28.9 million.

PAMA is a subsidiary of PT United Tractors, the distributor of Komatsu heavy equipment in Indonesia.

PT United Tractors is a unit of PT Astra International, one of the largest conglomerates in Indonesia.

TNB Coal’s mining asset in Indonesia is centred around Dynamic Acres Sdn Bhd, which in turn holds a 99 per cent stake in DEJ.

DEJ owns the exclusive mining rights to five concession areas in south Kalimantan, Indonesia, and supplies coal to TNB Fuel Services Sdn Bhd, Tenaga’s wholly-owned subsidiary since last year.

Tenaga had ventured into the coal ownership and operations business in Indonesia in 2002 when Datuk Seri Dr Jamaludin Mohd Jarjis was its chairman.

At that time, the national utility wanted more control over its supply chain and pricing of the commodity, one of the sources said.

However, royalty disputes at the TNB Coal level, with its 7.5 per cent partner, Indonesian tycoon Robert Priantono Bonosusatya, had affected the company’s operational growth, the source added.

Earlier this month, TNB chief executive officer Datuk Che Khalib Mohd Noh said the corporation was in discussions with its Indonesian partner to resolve any outstanding issues involving operations of the Indonesian subsidiary.

The issues included the selling price of coal, operation costs and internal processes.

Che Khalib said this following a media report citing an auditors’ report that stated TNB Coal may face losses of as much as RM226.64 million due to payments to a director, villagers and the sale of coal at below cost price.

– BERNAMA