Thailand's largest coal miner, SET-listed Banpu Plc, has divested its entire stake in a methane producer in China. Banpu, through its wholly owned subsidiary BP Overseas Development Co Ltd (BPOD), sold 32.5 million shares or 17% of Asian American Gas Inc (AAGI) to China CBM Investment Holding Ltd.
Banpu declined to reveal the value of the transaction but said BPOD realised a net gain of US$8.4 million or 278 million baht from the divestment.
AAGI, registered in the British Virgin Islands, has invested about $4 million in two coal-bed methane exploration and production projects in Shanxi province in eastern China.
The Panzhuang and Mabi methane projects are due to start operations this year and in 2010, respectively.
''Both projects are in the exploration stage and still need a large amount of capital investment,'' Banpu said in a statement to the Stock Exchange of Thailand yesterday.
''The divestment of AAGI will provide further financial flexibility to the company to pursue its strategic investment in coal and power businesses in China.''
The payment for the shares was completed yesterday and BPOD had transferred the shares to the buyer, said the statement. Banpu has set an investment target of $200 million in China through its wholly owned investment arm, Banpu Power Investment (China) or BPIC.
The company operates three combined heat and power (CHP) generation plants in northern China: Luannan, Zouping and Zhengding in Hebei province with a combined capacity of 248 megawatts (MW) and steam capacity of 808 tonnes per hour (tph).
It has operated five mines in Indonesia and two in China and plans to invest $330 million this year _ $180 million in coal and power businesses in China and $150 million to expand the capacity of its port and build a small power plant in Indonesia.
Coal was expected to generate about 50% of Banpu's cash flow this year, up from 30% last year, with the rest coming from the power business.
Banpu shares closed yesterday on the Stock Exchange of Thailand at 440 baht, down four baht, in trade worth 307.4 million baht.
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