ARMS: Bakrie able to secure funding for separation deal
Thursday, February 27 2014 - 01:19 AM WIB
LSE-listed coal miner Asia Resources Minerals Plc said that it has been informed by the Indonesian Bakrie Group that the latter has finally been able to secure the necessary funds to finance a separation deal on original terms.
Today, the Bakrie Group informed the company that it is now able to raise the full US$228 million (which combined with the $50 million already in the company's bank account and $223 million from the sale of Bakrie Group's indirect stake in ARMS to RACL is equal to $501 million) and therefore is now able to complete the transaction on its original terms and that it will be able to do so by 21 March,? said ARMS in a statement received late Wednesday.
ARMS added that it has now agreed amendments to the PT Bumi Share Purchase Agreement such that the Bakrie Group is required to fund $451 million (being $501 million less $50 million) into escrow by 19 March. Closing would then be expected to occur by 21 March. The company understands that RACL has extended the expiry date of its financing arrangements to 23 March 2014.
?The company has decided that it will not be extending the transaction again and therefore if funding is not received into escrow by 19 March at the latest then the Separation Transaction will terminate. In this context, the company is continuing to investigate alternative options to the Separation Transaction,? ARMS said.
ARMS, previously known as Bumi Plc, was co-founded by the Indonesian Bakrie family and Nathaniel Rothschild in 2010. But relations between the two then soured, with Bumi hit by board room fights, wrongdoing allegations, and falling coal prices, leading to the proposed split with the Bakries.
The planned separation has been delayed for several times. Last week when Bakrie Group said it faced a $65 million shortfall and requested an amendment to the deal.
Editing by Reiner Simanjuntak