LONDON-- Asia Resource Minerals PLC's co-founder and major
shareholder Nathaniel Rothschild said Monday he's considering a
rival takeover offer for the embattled U.K.-listed Indonesian coal
miner just days before a high stakes vote aimed at securing the
company's future as a going concern.
NR Holdings, a trust beneficially owned by Mr. Rothschild, is
fleshing out a possible takeover offer with Russia-based SUEK PLC,
the world's fifth largest coal miner by proved and potential coal
reserves, to buy out the remaining shares that Mr. Rothschild
doesn't own in the U.K.-listed Asia Resource.
The potential offer from Mr. Rothschild, who owns a combined
17.5% stake in ARMS, comes less than a week after Asia Coal Energy
Ventures Ltd., an investment vehicle controlled by ARMS minority
shareholder Argyle Street Management Ltd and backed by Indonesian
conglomerate Sinarmas Group, announced a nearly GBP200 million
($296 million) potential offer for the embattled miner. Mr.
Rothschild's last minute announcement indicates that ACE's offer
may be gaining traction among some shareholders even though ARMS
board said Monday that it still hasn't received ACE's offer.
ARMS listed its shares under its previous Bumi name in 2011. It
had asipirations of becoming a blue-chip U.K.-listed mining company
but its shares price has since tanked due to tumbling coal prices
and years of protracted board room battles over company's
future.
NR Holdings didn't provide much detail regarding its latest
possible cash offer except to say that it was conditional upon
shareholders voting in favor of Mr. Rothschild's recapitalization
plan on Wednesday. NR Holdings is offering to underwrite up to $100
million ARMS share issue at 25 pence a share in order to help repay
$450 million in debt due in July. For those shareholders who prefer
to sell their shares rather than remain long-term shareholders, NR
Holdings is now considering buying them out at a minimum price of
41 pence a share a person familiar with the matter said. This would
at least match the cash offer proposed by rival ACE last week.
ACE, which owns a 4.65% stake in ARMS through Argyle, proposed
last Tuesday that ARMS shareholders reject Mr. Rothschild's
recapitalization plan and instead accept its alternative offer. ACE
has proposed underwriting a larger ARMS share issue of up to $150
million at 28p a share with the backing of the Sinarmas Group. It
would then buy out any remaining shareholders at a premium of 41p a
share, valuing the company's existing shares at GBP98 million or
roughly $147 million.
Both ACE and NR Holdings say that their respective
recapitalization plans provide the most credible path toward
solving the company's financial woes and strengthening management's
operational performance given the expertise of their respective
financial backers. Sinarmas runs it own Indonesian thermal coal
operations and has the local know-how to sell coal domestically
given its investment in thermal coal-fired power generation.
Meanwhile, SUEK is a leading player in Asia's seaborne thermal coal
market, placing it in good stead to sell Indonesian coal to
China.
ARMs' board, which unanimously backed Mr. Rothschild's proposal
last month, said Monday it still hasn't received ACE's proposal. An
ACE spokesman said his firm has tried to reach ARMs' board on
several occasions but without response. It has now started to
negotiate directly with shareholders and plans to formally announce
an offer before the coming vote.
The success of the vote may come down to a few shareholders
including Austria-based Raiffeisen Bank International, which took
control of a 23.8% stake in ARMS last year after former ARMS
chairman Samin Tan failed to repay a loan on time.
NR Holdings already has board approval and backing from several
shareholders and bondholders for its proposal. However, the fact
that NR Holdings has made a rival cash offer just days before the
vote "shows that the bid being made by Asia Coal Energy is being
taken seriously by Nat Rothschild," the ACE spokesman said.
Write to Alex MacDonald at alex.macdonald@wsj.com
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