LONDON Jan 20 Coal miner Asia Resource Minerals
Plc(ARM) has agreed to give the influential Bakrie
family four more weeks to fulfill requirements for their split
from the company, further delaying a step which could pave the
way for the company's turnaround.
Indonesia-focused ARM, previously known as Bumi Plc, has
been hit by shareholder battles, allegations of wrongdoing and
falling coal prices.
In a bid to revive the London-listed company, shareholders
voted to split with the Bakrie family who co-founded it. The
family now has until Feb. 21 to enable the long-awaited split or
lose the $50 million they committed to the process.
"The Bakrie Group has agreed that the $50 million currently
held in escrow will be transferred to ... (ARM) by 23 January
2014 and will only be repayable if the company is in material
breach of its obligations," ARM said in a statement.
Under the separation deal, the Bakrie family is to sell its
ARM stake of 24 percent for $223 million to outgoing chairman
Samin Tan, who in turn would become the single largest
shareholder, with almost 48 percent.
The plan is then for the Bakries to use the sale income plus
the $50 million deposit and additional cash of about $228
million to buy back a 29 percent stake in Indonesian miner PT
Bumi Resources from ARM.
ARM has already twice this month granted the Bakries extra
time to complete the deal, which originally had a deadline of
Given repeated requests for an extension, some shareholders
have expressed concern that the Bakries might be having
difficulty financing the cash portion of the deal.
"There is no such thing as a risk-free transactions, but you
have got a $50 million non-refundable deposit so I suspect the
Bakries have to find a way to complete this one way or the
other," said one shareholder who asked not to be named.
"I believe incentives are what drive any company so, you
figure a 10 percent deposit is a pretty big incentive to
complete the transaction."
In exchange for the new extension, ARM has also imposed a
new condition: no meeting of Bumi Resources shareholders must be
called to discuss a debt restructuring deal with China's
sovereign wealth fund CIC before the split.
Shareholders in Bumi Resources earlier this month approved a
proposed $1.3 billion debt-for-equity swap deal with CIC, even
though ARM decided not attend the meeting or vote, but several
more steps are needed to finalise the deal.
A source close to ARM said the latter's board had found it
difficult in the past to exercise control of Bumi Resources
despite owning the largest stake of 30 percent, given the
Bakries' influence on Indonesia's political and business scene.
The Bakries founded Bumi Plc in 2010 together with investor
Nat Rothschild, with the aim of bringing promising Indonesian
coal assets to London investors, but their relationship quickly
The company's shares have lost about three quarters of their
value since listing and were trading around at 234.50 pence on
A spokesman for Bakrie Group declined to comment.