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Bakries Complete $501 Million Deal to Sever London Ties

Indonesian tycoon Aburizal Bakrie, left, and wife Tatty Bakrie watch a performance during a political campaign in Jakarta. Photographer: Adek Berry/AFP/Getty Images
Indonesian tycoon Aburizal Bakrie, left, and wife Tatty Bakrie watch a performance during a political campaign in Jakarta. Photographer: Adek Berry/AFP/Getty Images

March 25 (Bloomberg) -- Indonesia’s Bakrie family completed a $501 million deal to sever ties with London-listed Asia Resource Minerals Plc almost two years after the venture with financier Nathaniel Rothschild began to sour.

Asia Resource Minerals, or ARMS, will return more than $400 million to investors, it said today in a statement. As part of the complex, two-part transaction, Chairman Samin Tan has purchased the Bakries’ stake in ARMS, increasing his holding to 47.6 percent.

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. The Bakries are among Indonesia’s most powerful families, with business interests from commodities to real estate and media. Aburizal Bakrie is chairman of Indonesia’s second-biggest political party and a candidate in the presidential election to be held in July.

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 repeatedly as the family sought funds to finance it.

The transaction involves the Bakries buying back from ARMS 29.2 percent of coal exporter PT Bumi Resources. Tan also will buy 23.8 percent of ARMS from the family 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.

Debt Swap

Completion of the deal should allow Bumi Resources to complete a delayed $1.3 billion debt swap with China Investment Corp. shortly, Bakrie Group spokesman Chris Fong said today by phone. PT Bumi, Indonesia’s biggest coal exporter, will now be able to progress other investments that were constrained by the delay, he said.

Last month, the Bakries said they were $65 million short of financing the deal. A week later, the family said it had all the funds needed to meet the original terms.

ARMS dropped 1.3 percent to 227 pence at 12:15 p.m. in London trading, valuing the company at 547 million pounds ($903 million).

To contact the reporter on this story: Jesse Riseborough in London at jriseborough@bloomberg.net

To contact the editors responsible for this story: John Viljoen at jviljoen@bloomberg.net Alex Devine

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