GMR Energy, a subsidiary of GMR Infrastructure, has acquired Indonesian coal company PT Barasentosa Lestari for $80 million (around Rs 4 billion) through its wholly-owned subsidiary GMR Energy. The move is aimed at securing coal supply to its proposed 1,500 mega watt plant in the western coast. The company is looking for locations in Maharashtra and Gujarat for the plant.
The infrastructure firm has paid half of the acquisition amount upfront and the balance will be paid after commercial production begins two years from now. Coal from the Indonesian mine, spread over 25 acres, would be shipped to the new plant during the time of power generation, said A Subba Rao, chief financial officer, GMR.
The coal mine has reserves of 100 million tonne and is expecting an annual production of 5 MT. Barasentosa Lestari is holding a legal coal mining licence issued by the government of Indonesia. The licence provides a 30 year mining authorisation over two separate coal blocks in South Sumatra, Indonesia.
GMR Energy has acquired 100 per cent ownership interest of Barasentosa Lestari and looking for more mines in Indonesia and South Africa for its power plants.
"When the coal price was high in mid-2008, we negotiated for buying the firm for $100 million. Later, we renegotiated and managed to buy it at $80 million, and that too in two tranches. We have to pay the remaining amount only after beginning commercial production, expected after two years," said Rao.
GMR Infra shares closed at Rs 76.70, down 1.60 per cent, on the Bombay Stock Exchange on Wedneday.
The GMR Group has been reworking all its acquisition deals in the wake of the global slowdown. Besides hammering down the cost of these coal mines, the company had earlier successfully bargained a price reduction for acquiring the Netherlands-based power generation firm Intergen from the earlier $1.2 billion to just under $900 million.
