Press Metal buys 25% in PT Bintan

  • Markets
  • Monday, 18 Nov 2019

The proposed subscription provides Press Metal Group with the opportunity to secure a long term supply of alumina.

KUCHING: Press Metal Aluminium Holdings Bhd is acquiring a 25% stake in alumina producer PT Bintan Alumina Indonesia (PT BAI) for US$80.23mil (RM331.4mil).

The South-East Asia’s largest aluminium smelter has signed a share subscription agreement with PT Mahkota Karya Utama (PT MKU) and PT BAI, and a shareholders’ agreement with PT MKU, Global Aluminium International Pte Ltd (GAI) and PT BAI on the subscription of 25% equity interest in PT BAI.

PT BAI shareholders are GAI and PT MKU, which own 99% and 1% equity interest in PT BAI, respectively.

The shareholders of GAI are Nanshan Aluminium Singapore Co Pte Ltd (95%) and Redstone (5%). Nanshan Singapore is 100%-owned by Shangdong Nanshan Aluminium Co Ltd.

PT BAI is involved in the production of alumina and is currently in the midst of constructing a one-million-tonne per annum alumina refinery plant in Galang Batang, Indonesia, with expansion for another one million tonnes.

“This subscription will provide Press Metal with long-term supply of alumina via the purchase of not less than 50% of alumina produced before completion of the (alumina refinery plant) project, and up to 1.5 million tonnes upon completion of the project.

“With this, reliance on third-party suppliers for alumina needs will reduce considerably, providing stability for Press Metal’s smelting operations, ” Press Metal said in a filing with Bursa Malaysia.

The company said the proximity of the project’s location as compared to its present alumina sourcing from Australia would translate to substantial logistic cost savings.

Group chief executive officer Tan Sri Paul Koon described the subscription deal as “an exceptional opportunity for us to invest in a refinery, which will enable us to secure supply for our alumina needs.”

“Together with our earlier acquisition of Worsley, we will be able to cover about 80% of our enlarged alumina requirements, moving forward.

“This will strengthen us vertically and provide us an edge as we remove some uncertainties or supply constraints which could lead to operational disruptions. This is vital as we are growing our smelting operations, ” he said in a statement.

In February, 80%-owned subsidiary Press Metal Bintulu Sdn Bhd completed the acquisition of 50% equity interest in Japan Alumina Associated (Australia) Pty Ltd (JAA) for about A$256.9mil (RM747.2mil).

JAA holds a 10% participation interest in Worsley Alumina Unicoprorated Joint Venture, which owns and operates the Worsley alumina project, one of the world’s largest, longest life and low-cost alumina producers.

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