Kuala Lumpur-listed Coastal Contracts Bhd is making a foray into liquefied natural gas supply chain by acquiring 49 percent interest in Jakarta-based PT Jaya Samudra Karunia Gas (JSK Gas) for $6.6 million.
The company said that it has entered into a memorandum of understanding with PT Jaya Samudra Karunia Internasional (JSK Internasional) and Yudha Kurniawan Tanos to acquire 215 shares in JSK Gas for $6.55 million (RM26.44 million), translating into $30,476 (RM123,011) per share.
JSK Gas will issue 1,500 new ordinary shares at the price of $9,465 per share to Costal Contracts, which shall be subject to adjustment on completion, it said.
JSK Gas is a unit of JSK Internasional. It was recently awarded the LNG regasification and LNG storage contracts to support a 200MWh gas-fired power plant in Bali, Indonesia, by an Indonesian state-owned company.
This strategic acquisition marks the first step towards our long term and mutually beneficial business relationship with JSK, Ng Chin Heng, executive chairman of Coastal Group, said in the press release.
The acquisition will enable it to establish a presence in the LNG supply chain and to move up the value chain in terms of technology, technical knowledge and expertise in the downstream sector.
“As Indonesia’s power-generation plans are positioning the country to become one of the fastest-growing markets for LNG and a regional first-mover in small-scale LNG receiving terminal in Asia, we foresee exciting opportunities for growth in this new sector,” Heng added.
Coastal Contracts expects the JV to contribute positively to its consolidated earnings starting from the financial year ending June 30, 2017.