20th May 2015 16:43
LONDON (Alliance News) - The battle for control of Asia Resource Minerals PLC took another twist Wednesday, with financier Nat Rothschild and Russian coal producer OJSC declaring that they no longer intend to enter a bidding war with Asia Coal Energy Ventures.
Nat Rothschild, through vehicle NR Holdings, and SUEK PLC, the holding company for Russian coal producer OJSC Siberian Coal Energy Co, had been considering a takeover offer to rival the proposed 41 pence per share bid proposed by Asia Coal Energy Ventures, a group backed by the Indonesian Widjaja family's Sinarmas Group.
Asia Resource Minerals shares closed down 0.3% at 39.87 pence.
Rothschild's NR Holdings said it is still "fully committed" to his offer to underwrite a USD100 million open offer of shares as part of a broader recapitalisation for Asia Resource Minerals, which has a critical need for finance 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.
London-listed Asia Resource Minerals indirectly owns 84.7% of PT Berau, which indirectly owns 90% of Berau Coal, a thermal coal producer in Indonesia. The company is trying to regain control of Berau Coal, where Amir Sambodo has remained in position despite having resigned as group chief executive and the subsidiaries' president director in March.
NR Holdings said that the offer for Asia Resource Minerals made by Asia Coal Energy Ventures, which is managed by hedge fund Argyle Street Management Ltd, is "highly conditional".
The vehicle's takeover plans are complicated by the involvement of Asia Resource Minerals' ex-chairman, Samin Tan, who is working in concert with Argyle and the Asia Coal Energy Ventures vehicle.
Asia Coal Energy Ventures has made 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.
"The offer by ACE is an opportunistic attempt to deny independent shareholders the opportunity to recover value," a representative for NR Holdings said in a statement.
NR Holdings said that an amount due to the company from former Asia Resource Minerals director Rosan Roeslani under an arbitration award could be worth more in isolation than the valuation given to the company under Asia Coal Energy's offer.
"Successful enforcement of the USD173 million arbitration award against Roeslani would alone be worth in excess of 41 pence per share. The board of ARMS needs to ensure that all shareholders are treated equally - either ACE pays a full premium to secure control of these world-class coal assets, or the recapitalisation should proceed to enable the agreed refinancing to take place," the representative for NR Holdings said.
The statement noted that NR Holdings and SUEK "reserve the right to announce an offer or possible offer or make or participate in an offer or possible offer for ARMS or to take any other action permitted" under takeover rules within the next six months.
By Samuel Agini; [email protected]; @samuelagini
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