Bumi Plc Chairman Samin Tan said he won funding approval to buy part of the Bakrie Group’s stake in the Indonesian coal producer, meeting a deadline in a deal set to end the battle for control of the company.
“Funding to acquire the Bakrie’s stake as part of the overall separation transaction has been approved by our funding bank,” Tan said by e-mail, without naming the bank. “The loan agreement has been drafted subject to inclusion of a couple of commercial terms which are targeted to be finalized today.”
Tan has until today to satisfy Bumi’s board that he can fund his share of a $501 million deal that will complete the Bakries’ exit from the London-traded company. Bumi has been at the center of a battle for control between the Bakrie family and fellow founder Nathaniel Rothschild, scion of a British banking dynasty. Tan has agreed to buy the Bakries’ 23.8 percent holding in Bumi for $223 million.
Shareholders will vote Dec. 4 on a two-step transaction that will see the Bakries exit and Tan boost his stake to 47.6 percent. Bumi currently owns stakes in two coal producers and will be left with just a 76 percent holding in PT Berau Coal Holdings after the deal. They will also vote on a name change to Asia Resource Minerals Plc.
Investors should oppose the plan, Pensions & Investment Research Consultants Ltd., a U.K. adviser to institutional investors with more than 1.5 trillion pounds ($2.4 trillion) in assets, said in a report dated yesterday.
Changes to the proposed transaction from its original form last year, uncertainty over how Tan and the Bakries will finance it and a failure to recover $173 million of missing funds underpin the voting recommendations, PIRC said.
ISS Governance Services recommended shareholders vote to approve the deal, according to a report dated yesterday.
Bumi had yet to receive proof that the Bakrie Group could finance its share of the transaction, Chief Executive Officer Nick von Schirnding said on Nov. 8.
Funds for the Bakries’ $278 million share of the offer have been available since January in the form of a “direct cash investment by the Bakrie family,” Chris Fong, a spokesman for the Bakrie Group, said in an e-mail on Nov. 8.
Bumi rose 2.4 percent to close at 211.50 pence in London trading, valuing the company at 510 million pounds. PT Berau is Indonesia’s fifth-biggest coal exporter.