Indonesian heavy machinery distributor PT United Tractors seeks to expand its businesses by acquiring a gold miner, according to a filing. Its shares rose.
The company to purchase 100% stake in PT Arafura Surya Alam through conditional sale and purchase agreements signed on Sep. 12 by its subsidiaries with PT J Resources Nusantara and Jimmy Budiarto.
J Resources Nusantara is a unit of PT J Resources Asia Pasifik, while Budiarto is listed as the ultimate beneficiary of the two firms, according to information on the latter’s website.
Shares of United Tractors rose as much as 2.3% on Monday, reversing a decline in the previous session. J Resources Asia Pasifik extended gain to surge 7.8%.
The transaction also involved the purchase of 0.2% stake in entity PT Mulia Bumi Persada from Budiarto. The total enterprise value is listed as $540 million, the filing said.
United Tractors, part of Indonesian conglomerate PT Astra International, specializes in heavy equipment and distributes machineries under the Kubota and Komatsu brands. Its operations also include electric power generation as well as coal and gold mining.
It expects to finalize the transaction no later than Dec. 23, the filing said.
If United Tractors successfully consolidates production from the new gold mine, it could enhance its overall profitability by approximately 10%, with the group’s gold output rising close to around 300,000 ounces, Fauzan Djamal, an analyst at RHB Sekuritas Indonesia, wrote in a note on Monday.
“This contribution is expected to be fully reflected in financials starting in 2027,” he said. The company’s valuation remains attractive, trading at around 5.5 times of price-to-earnings ratio, below its five-year average of around 7 times, he added. (By Prima Wirayani)
