LONDON (Alliance News) - Asia Resource Minerals PLC Tuesday said its board will meet promptly to consider a potential takeover offer from Nat Rothschild's NR Holdings Ltd and SUEK PLC, as the battle for control of the company continued to heat up.
Rothschild's NR Holdings Ltd and SUEK had said Monday they are considering a possible cash offer to acquire Asia Resource Minerals, conditional on shareholders voting in favour of recapitalisation backed by Rothschild, rivalling a potential takeover offer from Asia Coal Energy Ventures Ltd.
SUEK is the holding company for Russian coal producer OJSC Siberian Coal Energy Company.
Asia Resource Minerals had said earlier Monday said that a formal takeover offer is yet to materialise from Asia Coal Energy Ventures, a vehicle backed by hedge fund Argyle Street Management Ltd and Indonesia-based Sinarmas Group.
Rothschild has offered to underwrite a USD100 million equity fundraising through an open offer priced at 25 pence per share 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."
It hit back 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 upcoming general meeting Wednesday.
Rothschild controls about 18% of the company's shares, compared to Argyle Street's 4.7%.
NR Holdings said 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 Wednesday, and noted that even if the recapitalisation is passed it is under no obligation to make any offer.
Under UK takeover code, NR Holdings and SUEK must announce a firm intention to make an offer or walk away by May 18. If the two do make an offer, they will form a jointly owned special purpose vehicle.
"The board intends to meet promptly to consider ARMS' position and will provide an update prior to the General Meeting," the company said in a short statement on Tuesday.
Asia Coal Energy Ventures maintains that it intends to make an offer for Asia Resource Minerals. Such as offer would be funded by Sinarmas Group, which is controlled by the Widjaja family, according to Asia Coal Energy Ventures, but sources close to Asia Mineral Resources have cast doubt on the reality of the vehicle's offer.
Last week's announcement indicated that Asia Coal Energy Ventures 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 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.
A source close to Asia Resource Minerals said that Asia Coal Energy Ventures' move appears to be designed to derail the refinancing deal already on the table. Questions have also been raised as to why the potential bid is being made through a British Virgin Islands-based shell company, while Asia Coal Energy Ventures sources have pointed to Sinarmas Group's position in its corner as evidence that the intention to launch a bid is serious.
A spokesperson for Asia Coal Energy Ventures said the vehicle intends to make an offer and that discussions with Asia Resource Minerals shareholders are ongoing.
A key element at play is that voting rights 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.
The company, 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.
By Steve McGrath and Sam Agini; stevemcgrath@alliancenews.com; @stevemcgrath1
Copyright 2015 Alliance News Limited. All Rights Reserved.