ARMS.L Regulatory News (ARMS)

18 March 2015

For Immediate Release

Asia Resource Minerals plc ("ARMS" or the "Company")

Recapitalisation Update

ARMS is pleased to announce that it has reached in principle agreement with the following parties regarding the terms of a restructuring of the 12.5% Guaranteed Senior Secured Notes due 2015 (the "2015 Notes") issued by Berau Capital Resources Pte Ltd and the 7.25% Guaranteed Senior Secured Notes due 2017 (the "2017 Notes" and, together with the 2015 Notes, the "Notes") issued by PT Berau Coal Energy Tbk ("BCE") (the "Proposed Notes Exchange"):

- certain persons holding (in aggregate) approximately 23.7% of the outstanding principal amount of the Notes (the "Steering Committee"); and

- NR Holdings Limited ("NRH") (a trust of which The Hon Nathaniel Rothschild is the principal beneficiary) and its advisors.

The Steering Committee was constituted from an informal working group of persons holding (in aggregate) approximately 50.6% of the outstanding principal amount of the Notes.

The Proposed Notes Exchange, together with the proposed raising of gross proceeds of US$100 million by the issue of new equity at a price of £0.25 per share by ARMS by means of an open offer underwritten by NRH (the "Proposed Equity Offering") as previously announced on 9 February 2015, constitute a comprehensive recapitalisation which would create a more stable capital structure for the benefit of all stakeholders.

Both the Proposed Notes Exchange and the Proposed Equity Offering remain (in all respects) subject to negotiation and execution of definitive documentation and the provision of all requisite approvals and consents. The Proposed Notes Exchange also requires the negotiation and agreement of a comprehensive term sheet that will be appended to an agreed form of lock-up and restructuring agreement in respect of the proposed transaction (the "Lock-up Agreement"), which holders of the Notes will be invited to execute. The Proposed Notes Exchange will then be implemented through the Scheme (as defined below) and concurrently with the Proposed Equity Offering.

Holders of the Notes that have questions regarding the Proposed Notes Exchange can contact the financial adviser to the Steering Committee and broader noteholder group (Moelis & Company) or the Company (Houlihan Lokey). Contact details are provided at the end of this announcement.

The terms of the Proposed Notes Exchange are as follows:

· the application of an aggregate cash amount of US$118.75 million in repayment of the outstanding principal amount of the Notes. This cash amount will be derived from the US$100 million new equity proceeds and cash (including currently restricted cash) held on the balance sheet of BCE;

· the exchange of the principal amounts of the 2015 Notes and the 2017 Notes into new notes maturing in July 2019 (the "2019 Notes") and December 2020 (the "2020 Notes") respectively (collectively, the "New Notes") by means of a Singapore scheme of arrangement (the "Scheme");

· an additional US$23.75 million will be applied in repayment of the principal amount of the New Notes following BCE or PT Berau Coal ("BC") obtaining a commitment for a revolving credit facility ("RCF") in an amount of up to $50m;

· the coupon payable in respect of the New Notes will be as follows:

- months 1-18: 6.75%, comprising 3.0% paid in cash and 3.75% in PIK;

- months 19-30: 7.5%, comprising 3.5% paid in cash and 4.0% in PIK;

- months 31-42: 8.0%, comprising 4.5% paid in cash and 3.5% in PIK;

- months 43-54: 8.25% paid in cash; and

- thereafter: 9.0% paid in cash;

· the coupon will be paid on a monthly basis;

· from the first anniversary of the issue of the New Notes, for a period of two years, 50% of any excess cash (after taking account of certain working capital and capex requirements and certain reserves required to be maintained under the CAMA (as defined below)) will be used to tender for the New Notes;

· the amendment of BCE's Cash and Accounts Management Agreement (the "CAMA") such that, among other things:

- funds on deposit in the collection accounts and operating accounts will be released daily instead of bi-weekly or monthly (as is currently the case);

- the existing notes interest reserve accounts will become inoperative, and funds in these accounts will be released for general corporate purposes; and

- the existing debt service accounts will be replaced by new debt service accounts which, following the initial transfer of deposits in the existing accounts, will build up funds for each coupon payment linearly with bi-weekly payments;

· optional redemption

- the 2019 Notes will be redeemable in cash at the option of the issuer at any time, subject to payment of the following premia:

§ months 1-12: 4.0%

§ months 13-24: 3.0%

§ months 25-36: 2.0%

§ months 37-48: 1.0%

- the 2020 Notes will be redeemable in cash at the option of the issuer at any time, subject to payment of the following premia:

§ months 1-12: 5.0%

§ months 13-24: 4.0%

§ months 25-36: 3.0%

§ months 37-48: 2.0%

§ months 49-60: 1.0%

§ thereafter: none;

· the premia will not apply to:

- the application of the proceeds of any future equity offering in redemption of up to 35% of the outstanding principal amount of the New Notes at any time at a premium of 1% (unless otherwise zero);

- the transfer of the obligations of the issuer(s) in respect of the New Notes to BC (by way of assignment, assumption, transfer or refinancing); and

- in relation to the New Notes, redemptions from excess cash flow or the proceeds of any RCF, each as referred to above; and

· the payment to each member of the noteholder group which enters into the Lock-up Agreement of a fee equivalent to 0.2% of the aggregate principal amount of the 2015 Notes and/or 2017 Notes which it holds at the relevant time for the purposes of the Scheme, together with a further "early bird" fee of the same amount if such member of the noteholder group enters into the Lock-up Agreement on or before 31 March 2015.

In connection with the Proposed Equity Offering, ARMS has agreed that it will not, on or prior to the earlier of (i) 27 March 2015 or, if earlier, the date on which a prospectus is published by ARMS in connection with the Proposed Equity Offering, and (ii) the date on which, in the reasonable opinion of ARMS, it is no longer possible to implement the comprehensive recapitalisation (or any part thereof) on the basis of the heads of terms agreed with NRH dated 9 February and publically announced by ARMS, approach any other person with a view to seeking any alternative underwriting proposal in respect of the Proposed Equity Offering.

In advance of the Proposed Equity Offering, ARMS will publish a prospectus which will include a statement on its working capital requirements. ARMS is currently evaluating its base and reasonable downside case working capital scenarios for the period to December 2016 to support such a statement. While the operating assumptions for these cases have not yet been finalised, the Company is currently considering the reasonable downside case in the Newcastle coal price to be US$5.0 per tonne down from the base case.

The Company's discussions with NRH regarding the Proposed Equity Offering are still ongoing and a further update will be released to the market in due course.

- ENDS-

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