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Rival emerges to Rothschild's Asia Resource plan

OWoN: Interesting, the Indians taking on the Rothschilds.

Nathaniel Rothschild

Rival emerges to Rothschild's Asia Resource plan

Financial Times
14 April 2015

The Bumi saga continues.

The Indonesian coal miner, now known as Asia Resource Minerals, is already heading for a shareholder vote on a recapitalisation plan put forward by Nat Rothschild, one of its founding investors.

Now another shareholder of the UK-listed company has put forward an alternative proposal and said it might make a cash offer for Asia Resource, subject to the Rothschild plan being rejected, reports James Wilson in London.

Argyle Street Management owns 4.65 per cent of Asia Resource. It said that it was considering a possible cash bid for the struggling coal miner in conjunction with Indonesia's Sinarmas group, managed by the Widjaja family.

Argyle vehicle - known as Asia Coal Energy Ventures, or ACE, said in a statement:

The proposed Offer would be to acquire the entire issued and to be issued ordinary share capital of ARMS not already owned by ASML at 41.0p per share, a 173.3 per cent premium to the closing price.

According to the possible offer, the value of the equity bid (pre cash injection) is $146m or £99m.

To recap, Mr Rothschild is underwriting an open offer for new shares in Asia Resource, at 25p per share, that is intended to raise $100m of new equity. The coal miner has a looming bond repayment to meet.

ACE said that if it made its offer it would implement an alternative recapitalisation to raise $150m at 28p a share.

The group said it believed ARMS was being run "in a sub-optimal fashion" and said the Rothschild plan - which it cautioned could lead to Mr Rothschild's vehicle taking control of the miner - was not in the interests of either shareholders or bondholders.

ACE believes that the ARMS Recapitalisation, without any compelling concurrent plan to implement and finance an improvement in operational efficiency, will ultimately be unsuccessful in light of the current soft market conditions for thermal coal which ACE believes are likely to persist into the foreseeable future.

In response Asia Resource said:

The Board has received no communication from ACE in respect to such a possible offer.

The Board will provide an update in due course.


1 comment :

  1. With coal nearing the end of its use tech-wise why even bother? I give it 5 years tops before the sexy free energy tech is emerging in full swing.


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