Raiffeisen Seizes Control Over Tan’s ARMS Stake for Loan Payment

Raiffeisen Bank International AG seized voting rights in 23.8 percent of Asia Resource Minerals Plc from former Chairman Samin Tan to secure the loan it provided for him to acquire the stake.

“The enforcement is done with the intention to receive repayment of our loan,” Raiffeisen spokesman Michael Lehotzki said by phone from Vienna today. The loan was $224 million on Nov. 22, 2013, he said. The current balance “cannot be disclosed due to strict confidentiality rules,” he said.

Tan confirmed the transfer of voting rights to the Austrian bank, while declining to elaborate on the reasons. “We handed over to them the voting rights so the shares still belong to us,” he said by phone. “There’s a huge difference. They had been collateral for the loan.”

Tan took on about $1 billion in debt in the form of a loan from Standard Chartered Plc to fund his initial purchase of a 23.8 percent stake in ARMS, formerly Bumi Plc, in January 2012. Since Tan made the purchase the stock has plummeted about 95 percent.

ARMS changed its name after agreeing to Indonesia’s Bakrie family’s $501 million deal to sever ties with Bumi almost two years after the venture with financier Nathaniel Rothschild began to sour. Tan bought a second 23.8 percent share from the Bakries as part of the separation deal, doubling his stake.

“The shares were received as security for the acquisition finance loan in 2013,” Lehotzki said. “By enforcing our security rights as secured lender, we became entitled to exercise all of the corresponding voting rights.”

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