Bakries Say They Have All Funds Needed for London Exit

Indonesia’s Bakrie family said it has all the funds needed to meet the original terms of a deal to exit the coal-mining venture it founded with Nathaniel Rothschild, a week after announcing it was $65 million short.

The Bakrie Group informed Asia Resource Minerals Plc it’s now able to raise the entire $228 million required to complete the deal, ARMS, formerly Bumi Plc, said yesterday in a statement. Last week, ARMS said the Bakries were $65 million short of closing the deal originally proposed in 2012.

Bumi was founded by financier Rothschild and the Bakries in a $3 billion deal 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 Bakries, who run a family-owned empire with investments in palm oil to property, had previously cited a slump in the PT Bumi Resources’ share price for difficulties in financing the exit.

The two-part transaction involves the family buying back 29.2 percent of Bumi Resources, the biggest Indonesian coal exporter, from ARMS. In the other component of the deal, ARMS Chairman Samin Tan buys 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 holding in PT Berau Coal.

The announcement “demonstrates ARMS Plc’s board acting decisively and preventing minority shareholders suffering further losses of $65 million,” Rothschild said in e-mailed comments. “Assuming the separation transaction completes next month, we look forward to working with Samin Tan and Borneo to ensure that PT Berau fulfills its full potential.”

A deadline to complete the deal by yesterday has been extended to March 21, ARMS said. No further extensions will be granted, it said.

“In this context, the company is continuing to investigate alternative options to the separation transaction,” ARMS said.

Before it's here, it's on the Bloomberg Terminal.