In 1743, in payment for his restoration to power, the King ceded the north coast of Java and Madura to the Dutch East India Company.

Pakubuwono III, who was supported by the company, became the new king, but he had to face a rival of his father, Raden Mas Said, who had occupied a region called Sukowati.

He was thenceforth known as Mangkunegara I.According to the daily register documents of Nicolaas Hartingh, the then-Dutch East India Company Governor for North Java, he left Semarang to meet with Prince Mangkubumi on 10 September 1754.

On September 23, 1754, a memorandum of understanding was finally reached, which concluded that Prince Mangkubumi would use the title of sultan and obtain half of the empire.

On 4 November 1754, Pakubuwana III delivered a letter to the Governor-General of the Dutch East India Company, Jacob Mossel, regarding his agreement on the outcome of negotiations between the Governor of North Java, Hartingh, and Prince Mangkubumi.

[5] After the signing of the treaty, Mangkubumi took the title of Sultan Hamengkubuwono and set up his court in Yogyakarta, not far from Kotagede, now a suburb of the city, where the tomb of Senopati, the founder of Mataram, is located.

[1] The accord, however, did not end hostilities in the area since Prince Sambernyawa (or Raden Mas Said) continued to fight against Pakubuwono III.