Coastal Group acquires 49% stake in JSK Gas

PETALING JAYA: Coastal Contracts Bhd (Coastal Group) will buy a 49% equity interest in PT Jaya Samudra Karunia Gas (JSK Gas) for US$20.75 million (RM83.2 million), in a move to tap into the growing liquefied natural gas (LNG) supply chain.
In a filing with Bursa Malaysia yesterday, the group said it has entered into a binding memorandum of understanding with PT Jaya Samudra Karunia Internasional (JSK), JSK Gas and Yudha Kurniawan Tanos to acquire an initial 215 ordinary shares in JSK Gas from JSK and Yudha for US$30,476 per share or US$6.55 million.
Upon completion, JSK Gas will issue 1,500 new ordinary shares at an issue price of US$14.2 million or US$9,465 per share to the company or its subsidiary. The purchase and shares consideration are subject to adjustment upon completion.
Once the transactions are finalised, JSK Gas will become a jointly controlled entity of Coastal Group.
Coastal Group and JSK will have equal seats on the board of commissioners and the board of directors in JSK Gas, PT Benoa Gas Terminal (BGT) and PT Jaya Transportasi LNG (JTL).
JSK Gas owns 99% of BGT, a LNG regasification service provider, which in turn owns 99% of JTL, whose principal activity is to provide LNG storage service with its floating storage unit.
JSK’s core business is in coal transportation in Indonesia and has ventured into the LNG supply chain. It was recently awarded the LNG regasification and LNG storage contracts to support a 200MW gas-fired power plant in Bali, Indonesia by an Indonesian state-owned company.
JSK Gas’ latest unaudited consolidated financial statements for financial year ending Dec 31, 2015, put its consolidated net liabilities and consolidated loss after tax at 5.48 billion rupiah and 7.48 billion rupiah respectively.
Coastal Group, which will fund the acquisition with internally generated funds, expects to complete the entire exercise by the fourth quarter of 2016.
It is expected to contribute positively to the consolidated earnings and earnings per share of Coastal Group for the financial year ending June 30, 2017 onwards.
The exercise is subject to the approvals of relevant authorities in Indonesia.