14th May 2015 10:51
LONDON (Alliance News) - Asia Resource Minerals PLC Thursday said it has secured the continuing option of proceeding with a recapitalisation supported by financier Nat Rothschild, as a battle for control of the company rumbles on in the background.
Nat Rothschild's offer to underwrite a USD100 million equity injection through an open offer of shares has been threatened by a takeover offer from Asia Coal Energy Ventures, a group backed by the Indonesian Widjaja family's Sinarmas Group. That takeover offer requires shareholders to vote down Rothschild's proposed recapitalisation but a meeting that had been scheduled for 1100 BST has been postponed by Asia Resource Minerals.
Rothschild's NR Holdings and SUEK PLC, the holding company for Russian coal producer OJSC Siberian Coal Energy Company, are considering a counter-offer.
Thursday's agreement with NR Holdings means Asia Resource Minerals will be able to resume the adjourned meeting by no later than July 31, an extension of two months from the previous date.
"Agreeing such an amendment to the subscription agreement allows the company to retain the option of proceeding with the recapitalisation, which the board believes is important in the context of a number of prevailing uncertainties," Asia Resource Minerals said in a statement.
London-listed Asia Resource Minerals indirectly owns 84.7% of Berau, which indirectly owns 90% of Berau Coal, a thermal coal producer in Indonesia. The company's need to refinance is critical as pressure on thermal coal prices has hurt its ability to repay USD450 million of notes due in July and a further USD500 million in March 2017.
The open offer was criticised by Asia Coal Energy Ventures, which is managed by hedge fund Argyle Street Management Ltd, for being structured in a manner likely to give control of Asia Resource Minerals to the NR Holdings concert party, which stood to hold a majority of the company's voting rights in the event of no other shareholders participating in the open offer.
Asia Resource Minerals has said its aim of securing a "long-term sustainable capital structure is achieved" by Rothschild's proposed recapitalisation.
Argyle Street Management currently has a 4.65% stake in Asia Resource Minerals, while Nat Rothschild has a 17.5% stake.
Asia Coal Energy, whose takeover offer values Asia Resource Minerals at 41 pence per share or GBP98.8 million, intends to underwrite a USD150 million equity raising in the event its takeover is successful.
The takeover offer remains highly conditional due to complexities around the involvement of Asia Resource Minerals' ex-chairman, Samin Tan, who is working in concert with Argyle and the Asia Coal Energy vehicle.
Asia Coal Energy has secured a deal with Austria's Raiffeisen Bank, which has a vital role to play since it took over 23.8% of the voting rights in Asia Resource Minerals from Tan in October 2014, under which the vehicle will buy loans owed to the bank by Tan companies.
That loan transaction needs the approval of Asia Resource Minerals' independent shareholders. The terms of the acquisition of the loans must also be deemed "fair and reasonable" by Asia Resource Minerals' independent financial adviser, investment bank NM Rothschild & Sons.
Tan controls a further 23.8% stake in Asia Resource Minerals.
Asia Resource Minerals shares were down 0.9% at 39.65 pence on Thursday.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
ARMS.L