Bakries Seek Fresh Delay to $501 Million London Exit DealJesse Riseborough
Asia Resource Minerals Plc said Indonesia’s Bakrie Group requested a new delay to a $501 million deal to exit its investment in the London-listed coal producer it helped set up in 2011.
The company, formerly known as Bumi Plc, is in talks with the Bakrie family “to understand the reasons for the delay and how long that delay needs to be and will consider this request for an extension based on those reasons,” ARMS said yesterday in a statement. The Bakries are unable to meet the current Jan. 24 deadline to complete the purchase of a 29.2 percent stake in Jakarta-based PT Bumi Resources, it said.
ARMS and the Bakries have been working on a split since last year after relations between the Indonesian family and fellow founder Nathaniel Rothschild soured amid financial probes in Asia and the U.K. ARMS plans to return more than $400 million in proceeds from the separation deal to shareholders.
The complex transaction, which also involves a $223 million deal with ARMS Chairman Samin Tan, has been delayed before by financing hold-ups. It was originally announced in October 2012. Bakrie spokesman Chris Fong said in November that funding for the deal had been available since January 2013 in the form of a “direct cash investment” from the family.
Investors in ARMS voted to approve the deal at a meeting in London last month. The Bakries now have until Jan. 17 to satisfy certain conditions in order to complete the deal, ARMS said. A further extension may be considered, it said.
“To agree to any further extension, the Plc special committee must now request full visibility on Bakries’ sources of finance so they can prove they have the means to complete this transaction,” Rothschild said in e-mailed comments.
A spokesman for the Bakrie Group based in London wasn’t immediately able to comment.
The two-stage separation agreement sees Tan buying 23.8 percent of ARMS from the Bakries, making him the largest shareholder with 47.6 percent. The Bakrie family is then required to pay $501 million for ARMS’ stake in PT Bumi. That then leaves ARMS with a 76 percent holding in PT Berau Coal.
ARMS dropped 1.1 percent to 235 pence by the close in London yesterday, valuing the company at 566 million pounds ($930 million).
PT Bumi last week failed to gain shareholder support for a $1.3 billion deal with China Investment Corp. ARMS is the largest investor in the Indonesian thermal coal exporter and had said in advance of the Jakarta meeting it would refrain from voting.
A further shareholder meeting is required to approve the asset collateral, asset transfer pledge and structure change, Ahmad Reza Wijaya, PT Bumi’s head of investor relations, said Jan. 13. PT Bumi Finance Director Andrew Beckham said after the Jan. 10 meeting that the stock transfer would be completed this month.