LONDON-- Asia Resource Minerals PLC said Wednesday that the
original separation deal from Bakrie Group is back on track after
the major shareholder informed the mining company that it is now
able to it is now able plug a funding gap.
Asia Resource Minerals, formally called Bumi PLC, said
Indonesian conglomerate Bakrie Group had informed the U.K.-listed
mining company it is able to raise the $228 million needed to
complete the original separation deal by March 21. This marks a
reversal from last week when Bakrie Group said it faced a $65
million shortfall and requested an amendment to the deal.
Asia Resource Minerals was formed in 2011, shortly after Bakrie
folded its coal assets into an investment firm created by European
financier Nathaniel Rothschild. The venture subsequently faced
difficulties because of boardroom rifts over corporate governance,
falling coal prices and an investigation into alleged financial
irregularities at its Indonesian coal assets.
Bakrie Group decided to part ways with the London venture and
proposed a separation deal in October 2012 that has since been
revised many times before it was finally put to a shareholder
vote.
Asia Resource Minerals said Wednesday it agreed to extend the
closing deadline once again to March 21 from Wednesday, and it
amended the deal so that Bakrie Group will now have to show proof
by March 19 that it has put in escrow the entire $501 million
needed to purchase Asia Mineral Resources' 29% stake in Indonesia's
largest coal mining company, PT Bumi Resources TbK.
In December, Asia Resource Minerals shareholders backed a
multistep deal in which Bakrie Group would sell its 24% stake in
Asia Resource Minerals to two companies controlled by Asia Resource
Minerals Chairman Samin Tan for $223 million. In a linked deal,
Bakrie Group would then buy Asia Resource Mineral's 29% stake in PT
Bumi Resources for $501 million.
Under the deal, Bakrie Group wasn't required to show any proof
of funds until the day the deal closed, even though it would have
to finance the $228 million to be paid in cash to Asia Resource
Minerals after taking into account the $50 million already in
escrow and the cash transferred from the Asia Resource Minerals
stake sale to Mr. Tan.
Asia Resource Minerals now says Bakrie Group will have to put
$451 million into the escrow account alongside the existing $50
million by March 19 for the deal to close.
The announcement "demonstrates ARMS PLC's board acting
decisively and preventing minority shareholders suffering further
losses of $65 million, " Mr. Rothschild said in a statement.
"Assuming the separation transaction completes next month, we look
forward to working with Samin Tan...to ensure that PT Berau
fulfills its full potential." PT Berau Energy TBK is Indonesia's
fifth largest coal producer and majority owned by Asia Mineral
Resources.
The London-listed miner company said it won't extend the
transaction deadline again and will terminate the separation deal
if funding isn't received by the deadline. "In this context, the
company is continuing to investigate alternative options to the
separation transaction," it added.
Corrections & Amplifications Samin Tan is chairman of Asia
Resource Minerals. An earlier version of this story incorrectly
identified him as a former chairman.
Write to Alex MacDonald at alex.macdonald@wsj.com
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