Indonesia’s Bakrie family expects to complete a delayed $501 million deal to exit its investment in Asia Resource Minerals Plc this week, ending a three-year attempt to expand coal-mining interests with a London listing.
The final portion of the $228 million needed to close the transaction will be raised today, allowing the separation from Asia Resource Minerals, or ARMS, to be completed by the March 21 deadline, Chris Fong, a spokesman for the Bakrie Group, said yesterday by phone from Brisbane, Australia.
The majority of the funds have been transferred into holding accounts, ARMS said in a statement. The Bakries have told the company the balance will be paid prior to the deadline, it said.
U.K financier Nathaniel Rothschild and the Bakries founded ARMS, formerly known as Bumi Plc, in a $3 billion tie-up announced in 2010 that grouped stakes in two Indonesian coal producers. Boardroom infighting and financial probes prompted moves by both parties to unwind their collaboration.
The separation deal, hampered by slumping coal prices and declining share values, was originally proposed by the Bakries in October 2012. It was then delayed on several occasions as the family sought funds to finance it. ARMS said last month there would be no extensions beyond the March 21 deadline.
The Bakries were required to deposit $451 million into an escrow account by yesterday, according to a Feb. 26 statement from London-based ARMS. Chief Executive Officer Nick von Schirnding has said that more than $400 million of the proceeds from the deal will be paid to ARMS shareholders.
Last month, the Bakries said they were $65 million short of funding the entire deal. A week later, the family said it had all the funds needed to meet the original terms.
The two-part transaction involves the family buying back from ARMS 29.2 percent of PT Bumi Resources, the biggest Indonesian coal exporter. ARMS Chairman Samin Tan will also buy 23.8 percent of ARMS from the Bakries for $223 million through his PT Borneo Lumbung Energi & Metal. The split with the Bakries will leave ARMS with a 76 percent stake in PT Berau Coal Energy.
ARMS fell 0.2 percent to close at 226.75 pence in London trading yesterday, valuing the company at 546 million pounds ($908 million.)