Jakarta. China Datang Corporation, a power company controlled by the Chinese government, has acquired 75 percent shares in a local power company controlled by conglomerate Sinarmas Group's Dian Swastatika Sentosa in a deal worth $394 million, the latter said in a statement on Monday. 

Datang Overseas (Hong Kong) Energy Investment Co, the Chinese company's investment arm, signed a deal for DSSP Power Mas Utama's shares over a virtual ceremony on Dec 23, the company said. 

The acquisition of DSSP Power Mas would add 600 megawatts (MW) in installed capacity to China Datang's portfolio, which currently includes several power plants in Asia. One of DSSP Power Mas' crown jewel is the Sumsel-5 steam power plant, which has two generators with a combined capacity of 300 MW  in Banyuasin, South Sumatra.

Kou Wei, China Datang's president director, said the deal with Sinarmas Group opened a new chapter of cooperation between them.

Kou Wei added that its strategic partnership with the Sinarmas Group includes a collaboration and innovation plan for expanding cooperation in Indonesia, Southeast Asia, and other overseas markets together.

For Dian Swastatika, which is a coal mining company, DSSP Power Mas divestment would help it diversify business risks and support its expansion plan, including exploring opportunities in renewable energy businesses, the company's management said in the statement. 

Franky Oesman Widjaja, Dian Swastatika's president commissioner, said the deal left a mark in a larger context of China-Indonesia's concerted efforts to overcome the Covid-19 pandemic and recover the economy. 

"We hoped that in 2021 onwards, bilateral cooperation and economic and trade exchanges between China and Indonesia will reach new levels," Franky said.

Dian Swastatika's shares rose 1.4 percent on Tuesday to trade at Rp 16,125 apiece, its highest level in two weeks, on the morning trading session at Indonesia Stock Exchange on Tuesday.