Mitsui Considers Stake Sale in Indonesia’s Paiton Energy

(Bloomberg) -- Japanese trading house Mitsui & Co. is considering a sale of its majority stake in PT Paiton Energy, one of Indonesia’s biggest independent power producers, people with knowledge of the matter said.

Mitsui is working with an adviser on a potential divestment of its 45.5% stake in the power producer, said the people, who asked not to be identified as the information is private. A deal could be worth more than $1 billion, one of the people said. Mitsui hasn’t started a formal sale process yet, but it’s been gauging interest from potential suitors, including regional electricity producers, the person said.

Deliberations are at an early stage and Mitsui could still choose to keep its stake in Paiton, the people said. A representative for Mitsui said the company is working strategically on recycling all its assets to strengthen its financials, declining to comment on any specific asset. A representative for Paiton Energy didn’t respond to requests for comment.

Shares of Mitsui jumped as much as 3.7% in Tokyo on Tuesday, while the benchmark Nikkei 225 Index rose 2.1% following a rally on Wall Street.

Paiton Energy, founded in 1994, owns three coal-fired power plants and generates about 13,500 gigawatt hours of electricity per year, contributing about 10% of the electricity used annually by the Indonesian island of Java, according to its website.

Qatari energy investment firm Nebras Power QSC holds a 35.5% stake in the Indonesian power producer, according to a press release on Nebras Power website. The rest is owned by PT Toba Bara Sejahtra and Jera Co., which is a joint venture between Tokyo Electric Power Co. and Chubu Electric Power Co.

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