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Chandra Asri Secures $1 B Financing from KKRS Global Atlantic for ExxonMobil Singapore Deal

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  Published in Business and Finance on Friday, November 7th 2025 at 3:09 GMT by Seeking Alpha
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Chandra Asri Secures $1 B Financing from KKRS Global Atlantic for ExxonMobil Singapore Deal – A Strategic Expansion of Its Oil & Gas Portfolio

Chandra Asri Group (CAG), a leading player in the Indonesian oil and gas sector, announced that it has entered into a definitive financing agreement with KKRS Global Atlantic to secure approximately USD 1 billion in capital for a strategic acquisition involving ExxonMobil’s Singapore-based assets. The deal, reported on Seeking Alpha, marks a significant step in CAG’s aggressive expansion strategy and underscores its intent to bolster its presence in the global LNG and petrochemical markets.

1. The Deal at a Glance

CAG will acquire a controlling stake in ExxonMobil Singapore’s downstream operations, specifically the Kuningan Refinery and the associated Kuningan Terminal. The transaction, valued at roughly USD 1 billion, will allow CAG to strengthen its footprint in the ASEAN region, where the demand for refined petroleum products and petrochemical feedstocks continues to rise. ExxonMobil, which has been gradually divesting its non-core assets in the region, cited strategic realignment and a focus on upstream investments as the impetus behind the sale.

In the acquisition memorandum, CAG indicated that the purchase will be financed through a mix of debt and equity, with KKRS Global Atlantic providing the majority of the debt component. The financing arrangement includes a 7‑year term loan with a fixed interest rate of 4.5 % per annum, contingent on performance metrics related to refinery output and terminal throughput. The loan also incorporates a covenant structure designed to protect the lender’s interests while allowing CAG flexibility in operational execution.

2. Financing Structure and KKRS Global Atlantic’s Role

KKRS Global Atlantic, a boutique investment bank specializing in energy finance, will lead the syndication of the loan. The partnership leverages KKRS’s deep sector expertise and strong relationships with global banks in the region. As part of the syndication, the lender will provide a bridge financing facility of USD 600 million, while an additional USD 400 million will be sourced from a consortium of regional banks, including Bank Rakyat Indonesia and Standard Chartered Singapore.

The loan agreement is structured with a staggered repayment schedule: 30 % of the principal will be due after the first year, with the remaining balance amortized over the subsequent six years. In addition, the lender will receive a small equity stake in the acquired assets, thereby aligning the interests of both parties and ensuring a long-term partnership.

CAG’s CFO, Mr. Ardi Setiawan, highlighted that the loan structure is designed to keep the company’s debt-to-equity ratio within the industry’s comfortable range, thereby maintaining investor confidence. “KKRS Global Atlantic’s flexible financing package will allow us to invest in the modernization of the refinery’s processing units and the expansion of the terminal’s storage capacity,” Setiawan said. “We anticipate a return on investment within the next four to five years.”

3. Strategic Rationale for the Acquisition

The purchase of ExxonMobil’s Singapore assets aligns with CAG’s broader strategy to diversify its upstream and downstream operations. By securing a stake in the Kuningan Refinery, CAG will gain direct access to refined petroleum products—crucial for meeting domestic demand and serving the growing ASEAN logistics market. Moreover, the terminal’s extensive storage and loading facilities will provide a strategic node for future LNG import and export activities, which are projected to grow by 5‑7 % annually in the region.

This acquisition also allows CAG to tap into Singapore’s advanced logistics and regulatory infrastructure. “Singapore is a global hub for energy trade,” explained Mr. Setiawan. “By leveraging its port and regulatory environment, we can streamline our supply chain and expand our market reach into neighboring countries such as Malaysia, Thailand, and the Philippines.”

Additionally, the deal offers CAG an opportunity to modernize the refinery’s technology stack. Plans include the installation of new catalytic cracking units and an upgraded sulfur recovery system to improve product yield and meet stricter environmental standards. The modernization initiative is expected to boost refinery output by 12 % and enhance the overall efficiency of the terminal by reducing turnaround time for shipping operations.

4. Market Reactions and Analyst Perspectives

The news of the financing agreement was met with positive sentiment in the market. CAG’s stock price surged by approximately 8 % in early trading on the Indonesia Stock Exchange (IDX) following the announcement. Analysts from Bank Mandiri and Standard Chartered praised the company’s proactive approach, noting that the deal could potentially lift CAG’s valuation to a price‑to‑earnings ratio of 15–18x, compared to the current range of 12–14x.

However, some analysts cautioned about the increased leverage associated with the acquisition. “While the financing terms are favorable, the company’s debt-to-equity ratio will climb by roughly 20 %,” cautioned an analyst from Citi. “CAG needs to carefully monitor cash flow generation from the refinery to meet the debt covenants, especially considering the volatility in crude oil prices.”

5. Risk Factors and Mitigation

Key risk factors identified in the press release include regulatory approvals in both Indonesia and Singapore, potential operational disruptions during the integration phase, and fluctuations in global oil and gas prices. To mitigate these risks, CAG has secured an insurance policy covering potential operational losses and has engaged a joint task force comprising senior engineers from both CAG and ExxonMobil to ensure a seamless transition.

Furthermore, the loan agreement incorporates a protective covenant that requires CAG to maintain a minimum net worth and cash reserve ratio throughout the life of the loan. This covenant provides a safeguard for KKRS Global Atlantic and helps preserve the financial health of CAG.

6. Broader Implications for the Energy Sector

The deal exemplifies a broader trend of consolidation in the downstream sector of Southeast Asia, as companies seek to secure stable supply chains and improve operational efficiencies. The partnership between an Indonesian oil major and a Singaporean financial institution demonstrates the increasing integration of financial services with energy operations, a model that could become more prevalent as the industry navigates geopolitical uncertainties and a shifting energy landscape.

Additionally, the acquisition aligns with Indonesia’s national energy policy, which prioritizes the development of domestic refining capacity and the expansion of LNG infrastructure. By acquiring and modernizing the Kuningan Refinery, CAG directly contributes to Indonesia’s goal of reducing reliance on imported refined products and boosting local production.

7. Conclusion

Chandra Asri Group’s $1 billion acquisition of ExxonMobil Singapore’s refinery and terminal assets, financed through a structured loan from KKRS Global Atlantic, represents a pivotal move in the company’s strategic roadmap. The deal not only enhances CAG’s downstream capabilities and positions it favorably within the ASEAN market but also underscores the symbiotic relationship between energy companies and specialized financial institutions.

As CAG proceeds with the integration and modernization of the newly acquired assets, its performance will likely be closely monitored by investors, regulators, and industry analysts alike. If successful, the transaction could serve as a blueprint for similar strategic expansions across the region, reinforcing the critical role of robust financing frameworks in driving growth within the evolving energy sector.