Jakarta-based ABM Investama, through its unit Pradipa Aryasatya, acquired a 70 percent stake in Energi Alamraya Semesta, an independent coal-fire power company in Aceh, for $7 million, the company said in a statement on Wednesday.
“The acquisition is in line with our strategic plan to develop the independent power provider business,” said Hasto Kristiyono, president director of Sumberdaya Sewatama — a subsidiary of ABM Investama that controls Pradipa Aryasatya.
“As EAS majority shareholder, we aim to increase EAS’s power capacity and serve growing demand for power in the area around the plant,” Hasto added.
Hasto said that growing demand in Indonesia for electricity meant the company supported a government program to increase the electrification rate nationwide. At the end of last year, the electrification rate stood at 71 percent, according to a report by state-controlled utility Perusahaan Listrik Negara. PLN is aiming to reach a 90 percent electrification rate by 2020.
EAS was established in 2008 and supplies electricity to PLN. The company also provides mine-mount power to Media Djaya Bersama, another subsidiary of ABM Investama that operates a coal concession in Aceh.
The company did not disclose EAS’s power plant capacity. In the first quarter this year, Sewatama produced 944.8 megawatts of power, 74 percent of its full year production target of 1,274 MW.
Its power generation business contributed 13.5 percent to ABM Investama’s $200 million total revenue in the first quarter this year. The biggest contributor was ABM’s mining contracting services businesses. The company is yet to report its first-half earnings as it undergoes auditing.
ABM is controlled by the Hamami family, which has a several-decade legacy.
Shares in ABM Investama fell 1.4 percent to Rp 3,525 on Wednesday, compared to a 1.2 percent fall in the benchmark Jakarta Composite Index.
ABM shares have dropped 8 percent so far this year as negative sentiment hit mining-related companies on concern of declining global demand for coal.