LONDON (Alliance News) - Asia Resource Minerals PLC Thursday said it has rescheduled its adjourned shareholder meeting for May 14, as the takeup of its USD94 million equity fundraising unsurprisingly proved to be low given the ongoing battle for control of the company.
The company had adjourned a shareholder meeting that was supposed to take place April 22, after it got competing takeover indications from sides that are battling for control of the coal miner. The meeting was supposed to approve the open share offer that closed on Monday and that was being underwritten by shareholder Nat Rothschild's NR Holdings Ltd.
Asia Resource Minerals said it got valid acceptances for 37.9 million shares under the open offer when it closed on Monday, or 14.0% of the shares on offer. The shares not taken up will be taken up by NR Holdings, and 271.0 million new shares are still set to be admitted for trading, representing 52.9% of the company's enlarged share capital, and raising net proceeds of GBP62.8 million. The offer was priced at 25 pence a share.
However, the open offer is conditional on being approved by the company's shareholders.
Asia Resource said its general meeting will now take place in London on May 14.
The delay to the meeting came after Rothschild's NR Holdings Ltd and SUEK, the holding company for Russian coal producer OJSC Siberian Coal Energy Co, said Monday they are considering a possible cash offer to acquire Asia Resource Minerals, conditional on shareholders voting in favour of the recapitalisation backed by Rothschild.
Rothschild had offered to underwrite the equity fundraising as part of a broader refinancing that would also involve the restructuring of Asia Resource Minerals' debt. NR Holdings said it believes that this refinancing is the only options currently available that will "preserve value for ARMS shareholders in the short to medium term."
However, it is facing opposition from Asia Coal Energy Ventures, a vehicle backed by hedge fund Argyle Street Management Ltd and Indonesia-based Sinarmas Group. Asia Coal has also said it intends to make a takeover offer for Asia Resource Minerals, although the company has said it has yet to receive a formal offer.
Asia Coal Energy Ventures has indicated it would be willing to pay 41 pence per share for the Asia Resource Minerals shares not already owned by Argyle Street. That possibility was mooted alongside proposals for an equity fundraising of USD150 million at 28 pence per share and a debt restructuring ahead of the need to repay USD450 million of notes in July this year and USD500 million in March 2017.
Rothschild controls about 18% of Asia Resource Minerals' current share issue, compared with Argyle Street's 4.7%.
NR Holdings earlier this week hit out at the potential offer from Asia Coal Energy Ventures, saying it provides neither the company nor its shareholders with any certainty, and urged shareholders to vote in favour of the recapitalisation at the general meeting.
However, it had conceded when it made its own takeover offer for Asia Resource Minerals that it understands that "certain shareholders may prefer to sell their shares at a premium to the current share price and not to remain long-term shareholders in ARMS," hence why it is considering an offer. However, it is making any potential offer subject to the recapitalisation being passed by shareholders, and noted that even if the recapitalisation is passed it is under no obligation to make any offer.
Asia Resource Minerals has said it will consider its position in light of the new takeover indications and will provide an update ahead of the general meeting.
A key element at play in the battle for the company is that over 23.8% of the voting rights in Asia Resource Minerals were transferred to Austria-based Raiffeisen Bank from Samin Tan in October 2014. Tan, an Indonesian investor who used to be the chairman of Asia Resource Minerals, is still able to control indirectly a 23.8% stake.
Asia Resource Minerals, which used to be known as Bumi PLC, was co-founded by Rothschild and the Bakrie family of Indonesia. The Bakrie family made an exit from the company in 2014, when it sold its 23.8% interest to Tan after a long battle over control of Bumi.
Asia Resource Minerals, which has been hurt by the slump in the price of thermal coal, indirectly owns 84.7% of Berau, which in turn owns 90% of Berau Coal, a producer of thermal coal in Indonesia.
Its shares were down 2.3% at 34.67 pence Thursday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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