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Surya Esa Perkasa, Mitsubishi provide US$50 mln loans to Panca Amara to fund ammonia project

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JAKARTA (rambuenergy.com) – PT Surya Esa Perkasa Tbk and its partner Mitsubishi Corporation have agreed to provide loans worth US$50 million to PT Panca Amara Utama, a subsidiary of Surya Esa Perkasa to fund the development of PAU’s ammonia plant project.

Surya Esa and Mitsubishi have signed Subordinated Loan Agreement, in which Surya Esa will provide US$24.20 million and Mitsubishi granted US$ 25.90 million.

Surya Esa Perkasa has investment in shares of PAU with the effectively ownership of 60 percent. PAU is a privately-held limited company, established and operates its business in Indonesia.

Currently, PAU is completing the construction of the plant and ammonia facilities of 2,000 mtpd in the District of Banggai, Central Sulawesi, Indonesia.

On Aug. 2, 2015, the President of Indonesia, Joko Widodo (Jokowi), inaugurated the groundbreaking of PT Panca Amara Utama’s (PAU) ammonia facility in Banggai Regency, Central Sulawesi. PAU was established by PT Surya Esa Perkasa Tbk. (SEP), the first publicly-listed LPG refinery on the Indonesia Stock Exchange.

The factory to be constructed on a landbank of 192 hectares and an investment of US$830 million, underlines PAU’s commitment in supporting the government’s directive of significant value addition to Indonesia’s natural resources, particularly the usage of natural gas as a raw material in the production of ammonia.

In order to the completion of the Project , PAU needs additional financial support of loan facility from IFC. Furthermore, in connection with the IFC loan, PAU also needs support from several shareholders. Therefore, Surya Esa Perkasa and Mitsubishi with the effectively ownership respectively of 60 percent and 29.73 percent have performed the transaction related with the IFC loan.

Furthermore, the Company and the PAU has made significant steps to realize the project as follows:

1. PAU has been allocated by 55 MMSCFD gas from gas wells Senoro-Toili derived from Donggi-Senoro block, until December 2027.

2. PAU has completed the acquisition area of 192 hectares. Land clearing of 25 hectares of land required for the project has also been completed. The land is ready for construction.

3. PAU has appointed PT Rekayasa industri as EPC Contractor Project.

4. PAU has signed a technology Licensing Agreement with Kellogg Brown & Root (United States, “KBR”).

5. As of the end of June 2015, the Company has invested to PAU approximately USD 87 million.

6. On 2 August 2015, the President of the Republic of Indonesia, Joko Widodo (Jokowi) has inaugurated a groundbreaking Project development.

Regarding to the realization steps of the above projects, on July 3, 2015, PAU has signed Amendment and Restated Loan Agreement related to the credit with IFC loan and related to the agreements with the Amendment and Restated Loan Agreement with IFC, as creditor and lead arranger, to finance the project, estimated at an estimated cost US$830 million.

Based on the Amendment and Restated Loan Agreement, PAU must use the best efforts to complete the Project before 31 August 2017, consists of:

– A Loan in the principal amount of USD 97.00 million and;

– The principal amount of the B Loan amounting to USD 415.00 million.

Furthermore, based on the Amendment and Restated Loan Agreement, the Company is also required to pledge all the shares in PAU for the benefit of the IFC.

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