Indika Invests $442 Million in Subsidiaries

By webadmin on 03:59 pm Jun 17, 2012
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ID/Efi Nurfiyasari

Indika Energy plans to spend $442 million this year to help finance the expansion plans of its subsidiaries, the company’s president director said on Thursday.

“We have a strong cash flow,” Arsjad Risjad told reporters.

Arjsad said that Indika had $700 million cash as of March this year.

The company will spend $256.2 million to finance the business expansion plans of Petrosea and Mitrabahtera Segara Sejati.

Indika will also spend another $130 million to finance the expansion of Multi Tambangjaya over the next five years and another $55.8 million for Mitra Energi.

Indika completed the acquisition of Multi Tambangjaya Utama for $136 million on May 31. The acquisition also assumed the MTU’s $69 million bank loan, Indika announced in a press statement released in May.

That acquisition will result in Indika indirectly owning 85 percent of MTU.

MTU is a bituminous thermal coal and coking coal mining company based in Central Kalimantan.

“The acquisition of MTU is in line with Indika Energy’s strategies to increase its coal reserves and resources and to continue diversifying the sources of its earnings and product mix,” Arsjad said in a statement last month. “We are prioritizing high thermal [coal] and then after that coking coal.”

Share of Indika rose 2.5 percent to Rp 1,600 on the Indonesia Stock Exchange on Friday. The stock has fallen 26 percent so far this year.