(Adds Nat Rothschild comments; background on separation deal)
LONDON, March 21 (Reuters) - Coal miner Asia Resource Minerals (ARMS) said its co-founding Bakrie family had paid the $278 million cash portion of a long-awaited deal to split from ARMS, which it hopes will end shareholder battles.
Everything is now in place to complete the separation by March 25, ARMS said on Friday.
“All Bakrie Group funding required to complete the separation transaction is now in holding accounts at the escrow bank,” the London-listed company said in a statement.
Indonesia-focused ARMS, previously known as Bumi Plc, has been hit by shareholder battles, allegations of wrongdoing and falling coal prices in the last few years.
To revive its fortunes, shareholders voted to split with Indonesia’s Bakrie family, which founded the business in 2010 together with investor Nat Rothschild.
The deal agreed last year will separate ARMS from PT Bumi Resources, Asia’s top thermal coal exporter, and focus its turnaround efforts on its other main Indonesian subsidiary, Berau Coal.
Under the terms of the complex deal, ARMS’s outgoing chairman, Samin Tan, has agreed to buy the Bakries’ 23.8 percent stake in ARMS through Indonesia’s Borneo Lumbung Energy & Metal Tbk, which will push Borneo’s stake in ARMS to as much as 47.6 percent.
The Bakries, in turn, will buy ARMS’s 29.2 percent stake in Jakarta-listed miner PT Bumi Resources using the proceeds from the ARMS stake sale and the $278 million in cash, amounting to a total of $501 million.
“I look forward to strengthening the board by adding a world-class independent non-executive director soon after the separation, and then it is over to Samin to ruthlessly cut costs in Indonesia,” Nat Rothschild said in an e-mailed statement. (Reporting by Silvia Antonioli; editing by Stephen Eisenhammer and Jane Baird)
Breakingviews
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.