Monday, March 21, 2011

Monnet old call buys Indonesian Thermal Coal Mines....

Monnet Ispat Scoops Up Indonesian Coal Firm For $24M
Deal to secure raw material requirements for Monnet Group's coastal power projects.
March 21, 2011, 04:53 PM IST

CX Partners-backed sponge iron maker Monnet Ispat & Energy Ltd has acquired Indonesian coal company PT Sarwa Sembada Karya Bumi for $24 million or around Rs 108 crore. The deal gives Monnet access to thermal coal mine spread over 25,000 hectares of which only 1,500 hectares have been explored. Besides, the company has established 65 million tonnes of coal reserve at the mine, at present.
The acquired firm has operations in the Jambi province of Sumatra region in the South East Asian country, that has become one of the most targeted ground for Indian firms specially steel producers and power generation firms to secure their natural resource requirements.
Sandeep Jajodia, executive vice chairman & managing director of Monnet Ispat & Energy said due to the location of the coal mine it would be cost effective to ship the coal back to India to feed the group’s coastal power projects.
“We plan to mine more coal than required for our captive needs, for selling in the open market which will be a long term source of revenue, as there seems to be good potential for the reserves to go up substantially,” he said.
Jajodia added that the Indian firm managed to acquire the asset at a low value as the deal was struck in 2008, but the final agreement took time to execute due to various regulatory processes.
Last April, the new private equity firm floated by former Citigroup Venture Capital India chief Ajay Relan had picked around 8% stake in Monnet Ispat through the secondary market.
The group had also raised capital from Blackstone for its power arm. Blackstone had invested Rs 275 crore (approximately $60 million) for 12.5% equity stake in Monnet Power Company Limited, an independent power producer that is developing a 1,050 MW coal fired power plant in Orissa backed by pit-head captive coal mines


  1. And I do remember you telling monnet to be a 'blue chip in making' its on the way... :-)