Seroja to acquire Indonesia nickel miners for US$2B in reverse takeover

Ore containing copper, cobalt and nickel at the Andover mine in Western Australia. Photo by Paul-Alain Hunt on UnsplashOre containing copper, cobalt and nickel at the Andover mine in Western Australia. Photo by Paul-Alain Hunt on Unsplash

Seroja Investments has entered a deal to acquire Denway Development from Nickel Global Group for US$2 billion in shares in a reverse takeover deal, according to a filing to SGX Friday.

The US$2 billion in new shares will be issued at S$0.50 each, the filing said, adding the consideration will be subject to an independent valuation.

Because Nickel Global Group will hold more than 30 percent of Seroja after completion, one condition of the deal is receiving a waiver of the requirement to make a mandatory general offer for the remainder of the company, the filing said.

Hong Kong-based Denway Development, which is wholly owned by Nickel Global Group, holds 75 percent each of PT Karyatama Konawe Utara (KKU) and PT Konutara Sejati (KS), both based in Indonesia, the filing said. Both KKU and KS own open-pit nickel mines in the North Sulawesi region of Indonesia, the filing said.

Seroja said the acquisition would likely meet SGX requirements for a new listing, which is a requirement after it became a “cash company” in 2019 when it sold its operating business.

“The proposed acquisition would present the company with an opportunity to acquire a majority stake in two mines with a sizeable reserve of nickel ore. If the information presented to the company is accurate, the nickel ore reserves at the two mines may be the 3rd largest nickel ore reserve globally,” Seroja said.

“Nickel is needed to make lithium batteries and the price of nickel ore has increased significantly because of the demand for lithium batteries,” the company said.

The target company posted revenue of US$25.84 million for 2021, with a net profit of US$2.35 million, swinging from a year-earlier loss of US$949,000, the filing said.

Seroja said it would call an extraordinary general meeting (EGM) of shareholders to approve the deal.