Listed oil and gas company Benakat Petroleum Energy plans to complete its $600 million acquisition of coal mining services firm Astrindo Mahakarya Indonesia in September, which has been plagued in the past four months by administrative problems that are affecting potential income.
“The acquisition of these assets is more complex than we think,” said Firlie Hanggodi, a Benakat director, said on Friday. “There are legal and contractual issues that need to be resolved.”
Firlie said that the company is finalizing financing from a number of banks for the acquisition.
Benakat had agreed to buy 99.99 percent of Astrindo in December, with expectations of the coal contractor adding about $80 million to its net income this year. Benakat had forecast net income this year at Rp 306.8 billion ($32 million), swinging from a loss of Rp 61.3 billion in 2011, according to its report to Indonesia Stock Exchange early this year. Benakat set its revenue target at Rp 743.4 billion, which would be more than double last year’s Rp 340 billion.
“With this delay, we may have to revise our target. We still hope to book net profit,” Firlie said. He refused to elaborate.
Astrindo would be Benakat’s next move to tap into the booming coal mining industry, as the company shifts its focus from production of crude oil and natural gas, its current main businesses. Benakat also has a 27.4 percent stake in Java Mitra Sentosa, a coal-mining company that has a 53.7 million-metric ton coal reserve in East Kalimantan.
Astrindo provides coal-mining infrastructure and mining services, including transportation and port management, at its sites on Kalimantan and Sumatra, two islands that contain the bulk of the country’s more than 5 billion tons of coal reserves.
Astrindo’s facilities can service as much as 70 million tons of coal annually, which has been taken up by its clients through several long-term contracts. Benakat had said that the additional $80 million in net income to Benakat next year would be more than double the $25 million to $30 million expected next year from Benakat’s existing subsidiaries. It also projected that Astrindo would contribute as much as $180 million to the company’s net income by 2013.
This year Benakat set aside $56.5 million in capital expenditure for its own oil drilling operations. The company is drilling 17 new oil wells and work on 11 wells, as it expects oil production to reach 3,275 barrels of oil per day by December. Of that amount, Benakat set aside $24.9 million in capital expenditure this year for its wholly-owned subsidiary Patina Group, which has daily production at 3,070 barrels.
Benakat’s stock fell 0.5 percent to Rp 183 in Friday trading.