KUCHING: Press Metal Aluminium Holdings Bhd (Press Metal) has completed the second subscription tranche of new shares in PT Kalimantan Alumina Nusantara (KAN) in relation to an alumina refinery joint venture project in West Kalimantan, Indonesia.
Wholly-owned subsidiary Press Metal International Resources (HK) Limited subscribed for 40 million Series C shares in KAN for US$40 million (RM180 million) on December 20, 2024.
Thereby, the second subscription tranche of the proposed subscription has been completed, Press Metal said in a filing with Bursa Malaysia.
On September 18, 2024, Press Metal announced that it had entered into a shareholders’ agreement and share subscription agreement with PT Alakasa Alumina Refineri (AAR) and PT Dinamika Sejahtera Mandiri (DSM) and PT KAN to set up a strategic joint venture whereby KAN will establish and operate
an integrated alumina refinery plant, jetty and supporting infrastructure in Sanggau, west Kalimantan.
The refinery is expected to have an annual production capacity of one to 1.2 million tonnes (Phase 1), with a potential expansion to double the output.
The total cost of Phase 1 is US$750 million (RM3.238 billion).
Press Metal and/or its affiliates will subscribe for 80 per cent equity interest in KAN for a total subscription price of RM1.036 billion, executed in seven tranches over the next year. The subscription will be funded through the group’s internally generated funds. AAR and DSM shall hold 19.77 percent and 0.23 percent respectively in KAN.
The first tranche subscription of 20 million Series B shares was completed on October 22, 2024, resulting in KAN becoming a subsidiary of Press Metal.
The third, fourth, fifth and sixth tranche subscriptions will all involve 40 million shares each whereas the seventh tranche will be 20 million shares.
According to Press Metal group chief executive officer (CEO) Tan Sri Paul Koon, the integrated aluminium refinery plant project in west Kalimantan represents an unique opportunity to drive the group’s sustainable long-term growth.
“By partnering with AAR and DSM through this joint venture, we are not only expanding our upstream business operations but also unlocking synergies that will enhance the overall value of Press Metal group.
“This venture aligns with our strategy to reinforce and continuously strengthen out leading position as the largest smelter in Southeast Asia and boost our competitive edge across the aluminium value chain. It is an effective approach towards expanding our upstream presence while ensuring higher self-sufficiency and a stable supply of our alumina needs which are critical to our core smelting operations.
“This will also reduce our reliance on third-party suppliers and traders, ensuring greater operational resiliency and efficiency.
With a long-term offtake agreement expected to commence once the refinery is operational, we anticipate cost savings that will further optimise our overall operations,” he said recently.
