TPG explores Indonesian coal deal

Reports of an imminent $1.28bn deal for PT Bumi Resources are premature and carry a higher price tag than the firm would likely consider, PEO has learned.

US private equity firm TPG is exploring a deal for an Indonesian coal mining company, according to a market source.
Reports from local Indonesian newspaper Bisnis Indonesia that a TPG-led consortium had offered $1.28 billion for a 35 percent stake in PT Bumi Resources were inaccurate, the source said, noting that the price tag was too high.

The source could not confirm whether the size of the equity stake was correct, but stressed that the deal was not imminent, as it was characterised in the report.

Bumi owns four primary business units: an eco-coal operation for international and domestic power generation companies; a thermal coal operation which Bumi acquired from BP and Rio Tinto in 2003; an oil and gas business based in Yemen; and a 60 percent ownership stake in Enercorp, a marketing agency firm responsible for the marketing of Bumi energy products for the Indonesian market.

The company’s EBITDA grew 95 percent from $233 million for the first half of 2007 to $455 million for the first half of 2008, according to a Bumi earnings report.

TPG has extensive experience in the energy sector, and last October participated in the record-setting $45 billion investment of Texas energy utility TXU.

The firm also has a well-documented interest in Indonesia, Southeast Asia’s largest economy.  Last year, TPG purchased a 72 percent stake in Bank Tabungan Pensiunan Nasional for $200 million. TPG is a major backer of Northstar, an Indonesia-focused private equity firm, and holds a 15 percent stake in Northstar’s debut fund closed last year on $110 million.