ARMS says separation with Bakrie remains on track
Thursday, February 13 2014 - 01:49 AM WIB
LSE-listed coal miner Asia Resource Minerals Plc (ARMS) said that the planned separation with the Indonesian Bakrie Group remains on track although the latter had failed to meet certain conditions by the Wednesday deadline.
?The separation transaction requires certain conditions precedent to be satisfied by today and without such satisfaction the separation transaction will terminate. The Bakrie Group has now informed the company that these conditions will not be satisfied today but that it believes they can be satisfied by 19 February. The company has therefore agreed to extend the date by which these conditions need to be satisfied to 19 February,? the Indonesia-focused coal miner, previously known as Bumi Plc, said in a statement obtained Wednesday.
ARMS said that the deadline for completion of the separation deal on February 21 remains unchanged, although the company noted that it may be necessary to extend this deadline by up to a week to allow time for the separation transaction?s completion mechanics to be affected.
Bumi was set up in 2010 by the Indonesian Bakrie family and Nat Rothschild, but relations between the two have soured during the past couple of years with accusations of wrongdoings from both sides amid the global coal market downturn. Shareholders then approved a proposal for the separation of Bumi with the Bakrie family.
Under the planned separation deal, the Bakries would sell their 23 percent stake in ARMS for US$223 million and use the sale income plus the $50 million deposit and an additional $228 million to buy ARMS? 29 percent stake in IDX-listed mining giant PT Bumi Resources Tbk.
Some analysts doubt whether the asset-rich but often cash-poor Bakrie family would be able to come up with the necessary funds to complete the proposed separation transaction on time. The fact that the share price of Bumi Resources has fell by about a third compared to the price when the proposed-split was agreed has further complicated things for the Bakries.
Editing by Reiner Simanjuntak