Indonesian tycoon to buy 30% of PT Bayan Resources, setting up a coal power play

The deal and the rally

A late Thursday filing said Haji Isam reached a Sept. 16 agreement to pick up 30% of Bayan via PT Jhonlin Baratama. The stake would come from founder Low Tuck Kwong and his daughter Elaine Low, the two largest holders, and the transfer depends on several conditions. The filing didn't include a sale price. Requests for comment went unanswered by Jhonlin and Bayan.

Investors took notice. Bayan shares surged as much as 20% during Friday trading in Jakarta, the biggest intraday move in about a month, putting the stock on course for a roughly 12% weekly gain. PT Sucor Sekuritas equity analyst Andreas Yordan Tarigan said traders are waiting on the nitty gritty to see how it affects the share price, adding, "But the market has been waiting excitedly for this to happen. It's always exciting when there's a jumbo transaction happening."

Bigger ambitions and coal volumes

Earlier this month, Haji Isam made a $3 billion all-cash offer to acquire 62% of Bayan, per people with knowledge of the discussions. That bid implied a valuation of about $4.8 billion for the miner. His wider enterprise, PT Jhonlin Group, is already a sizable thermal coal producer; Bloomberg reported in July that the group applied this year for authorization to produce 60 million tons. Bayan extracted about 68 million tons last year.

Taken together, those volumes would put him ahead of industry giants such as Glencore Plc and trailing solely Indian and Chinese producers that sell into their home markets. If he ends up with control of Bayan, the 49-year-old from Kalimantan would run the largest coal operation in Indonesia, which is the world's top exporter of the fuel.

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The backstory and political ties

Haji Isam has been pushing to take control of Bayan in a quest to rank among the biggest coal producers globally. He was one of the largest supporters of President Prabowo Subianto's 2024 campaign, and he currently has responsibility for significant state initiatives, among them a 1 million hectare food estate in Papua. One day after he was sworn in, the president traveled to Batulicin, the entrepreneur's seaside hometown, to express his thanks. While most of Haji Isam's businesses are private, people who know him say his wealth easily tops $1 billion.

Bayan, which was founded by Singapore-born Low in 2004, saw the Indonesian government reduce its production quota earlier this year, which led the company to declare force majeure last week. Bloomberg said in February that rivals including PT Bumi Resources and PT Adaro Andalan mostly avoided the mandated production cuts.

What to watch from here

All eyes are on the conditions attached to the 30% transfer and any hint of pricing. The potential for control, the sheer scale of combined output, and any changes to quotas could all sway how the stock trades.

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