Southeast Asia’s biggest aluminium smelter Press Metal Aluminium Holdings Bhd came to an agreement to purchase a 25-percent share in PT Bintan Alumina Indonesia last week.
According to press reports, the agreement took the form of a Memorandum of Understanding, with details of the deal left to be agreed upon at a later date.
Bintan Alumina, which is primarily involved in the production of non-ferrous metals, is in the midst of building a 1 million metric ton per annum alumina refinery and associated operations in the Galang Batang Special Economic Zone in the Riau Islands Province.
Commenting upon the deal was Group chief executive officer Tan Sri Paul Koon, who said his firm is always on the lookout for new opportunities to shore up its position as a globally-integrated aluminium corporation.
“We are constantly on the lookout for suitable assets to strengthen our position as a globally integrated aluminium corporation. We are excited about the synergistic benefits of this opportunity to Press Metal as it allows us to secure a substantial portion of our long-term alumina needs.”
“We are still in discussions and the final terms are yet to be determined,” he continued. “We are still on expansion mode and have the intention to tap into the debt market to fund our growth. Our current net gearing is at a reasonable level. The capital injection for this asset is progressive in nature and therefore our gearing will continue to be manageable with our anticipated strong cashflow.”
Press Metal noted that the deal is subject to the usual due diligence and regulatory approval. It provided no timetable for the sale’s completion nor any details regarding financing of the purchase.