Latham & Watkins has advised energy and infrastructure company Dian Swastatika Sentosa (DSS) on the proposed sale of its 67 percent stake in Indonesia-listed Golden Energy Mines (GEMS) to United Fiber System (UFS) for S$1.55 billion ($1.24 billion), a deal that is expected to boost GEM’s profile as a regional coal company.
As a result of the agreement, SGX-listed UFS, a construction and wood products company, saw its stock price surge 71 percent to 4.8 Singapore cents; the biggest increase since May 2003. Before the deal, it had declined 49 percent in a year. Following the agreement, UFS will issue new shares as consideration for the proposed acquisition, resulting in DSS acquiring 92.8 per cent of UFS’s enlarged share capital. The proposed acquisition, subject to definitive documentation and regulatory approvals, will result in the reverse takeover of UFS by DSS, if completed.
GEMS has eight coal-mining concessions spread over 36,000 hectares in Indonesia’s South and Central Kalimantan and Sumatra island, according to its website. The projects have 849 million metric tons of proven and probable reserves. The proposed acquisition would allow it to be listed on the SGX, and make it better known in the international investor community, ensuring funding becomes easier in the future.
The Latham team advising DSS on the deal is led by Singapore partner Sin Chei Liang, who heads the firm’s Singapore law practice, and is supported by Singapore associates Marcus Lee and Soh Jing Ting. The firm had also previously advised both DSS and GEMS on the sale of an aggregate of 30 percent stake of GEMS to GMR Infrastructure Investment (Singapore) Pte Ltd, an entity owned by the GMR Group, for an aggregate consideration of $500 million in November 2011. The sale was in connection with the initial public offering of GEMS.
DSS is also being advised by Makes & Partners, while Stamford Law Corporation and LasutLay & Partners are advising UFS. ALB
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