LONDON (Alliance News) - A vehicle supported by hedge fund Argyle Street Management and Singapore's Sinarmas Group Tuesday said it is mulling a takeover offer for Asia Resource Minerals PLC, presenting a possible "white knight" alternative to an existing restructuring plan backed by financier Nat Rothschild and recommended by the company.
The potential offer showed that Sinarmas is funding Asia Coal Energy Ventures Ltd, a company managed by Hong Kong hedge fund manager Argyle Street Management Ltd, which already owns a 4.65% stake in Asia Resource Minerals. The offer would aim to acquire the shares not already owned by Argyle Street Management for 41 pence per share.
The Asia Coal Energy Ventures' alternative proposes an equity financing of USD150 million at 28 pence per share by Asia Resource Minerals, a fundraising which the vehicle would underwrite. Those funds would be put to reducing debt and exchanging its existing 2015 and 2017 notes.
The news presents an alternative to Asia Resource Minerals, which has asked shareholders to vote in favour of the separate recapitalisation plan backed by Nat Rothschild at a meeting scheduled for April 22. Under that proposal, Asia Resource Minerals is looking to raise USD100 million in an equity raising open offer priced at 25 pence per share underwritten by Rothschild's NR Holdings vehicle. The Rothschild-supported deal also include a restructuring of debt in the form of notes due in 2015 and 2017.
Asia Resource Minerals, which was formerly known as Bumi, responded with a statement in which it said that it has "received no communication from ACE (Asia Coal Energy Ventures) in respect to such a possible offer".
Argyle Street Management plans to vote against the existing restructuring plan at the general meeting.
"The possible offer to ARMS shareholders would provide a full cash offer at a significant premium for all equity holders, while providing a much stronger operational platform for the coal asset in Indonesia, and subsequently a more tangible solution for all debt holders. We urge investors to reject the opportunistic attempt by NR Holdings to gain control of ARMS without making a full and fair offer to its other shareholders," Kin Chan, a partner at Argyle Street Management, said in a statement.
"We welcome the involvement of a group of the stature of Sinarmas as a 'white knight' to this key Indonesian asset," Kin Chan added.
According to the statement, Asia Coal Energy Ventures Argyle Street Management, Sinarmas are seeking to enter talks with Asia Resource Minerals about the possible offer and restructuring.
"For the avoidance of doubt, if the Asia Resource Minerals board declines to engage in constructive dialogue with Asia Coal Energy, Asia Coal Energy may proceed with the possible offer in any event," the statement said.
Asia Resource Minerals shares closed flat at 15 pence on Tuesday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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