Asiamet Resources (LON:ARS ) is to dispose of its wholly-owned subsidiary Indokal, which hosts the BKM Copper Projectin Central Kalimantan, Indonesia, for a total of US$163.4m.

The company struck a deal with Indonesian private company, PT Wasesa Indo Nusa ("PT WIN") to acquire its wholly-owned subsidiary Indokal Limited ("Indokal") which holds the Kalimantan Surya Kencana (“KSK”) Contract of Work which includes the BKM project.

Indokal will be acquired by PT WIN in a staged transaction for a total of $163.4 million.

The acquisition price will comprise $10m paid in cash on the execution of a binding sale and purchase agreement ("SPA") while the next $40m of cash will come as PT WIN completes an intended stock market IPO onto the Indonesian Stock Exchange in early 2021, it noted.

Asiamet will then receive PT WIN shares equating to 22.5% of the company in two tranches. It will continue to manage the KSK project for a period of up to 12 months (extendable by mutual agreement) following the IPO of PT WIN through a management services contract.

Due diligence work is expected to take around 30 days, but the Company highlighted that the timeline may vary due to the current restrictions associated with COVID-19.

Shares in Asiamet have traded within a range of 2.20p and 2.60p over the past month and almost doubled this morning, trading 72.00% higher at 4.3p following the announcement.

"The Asiamet Board fully endorses and supports this transaction,” said Tony Manini, Executive Chairman of Asiamet who added that the group will retain “a very meaningful exposure” to the upside at BKM and KSK and manage activities currently in progress.

Asiament said it intends to retain its shareholding and continue to work with PT WIN on the development of BKM while retaining the flexibility to re-evaluate its position at any time.

As part of the proposed transaction, PT WIN is also acquiring Aeturnum Energy International PTE, a commodities trading business which owns 19.9% interest in Asiamet Resources.

PT WIN plans to undertake an IPO on the Indonesian Stock Exchange in early 2021 which would result in an equity value of around $500m for the Company. Discussions are currently underway with several highly rated Indonesian financial institutions to underwrite the IPO. 

‘With its existing cash reserves and expected proceeds from the planned IPO, PT WIN expects to have sufficient financial resources to enable the development pathway for the BKM Copper Project,’ Asiamet highlighted to investors. 

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