Cakra, Cokal enter bid implementation agreement

By Romel S. Gurky

ASX-listed Cokal Limited announced Wednesday it has entered into a bid implementation agreement with IDX-listed PT Cakra Mineral Tbk (CKRA), under which the latter company will make a conditional off market takeover bid for all of the shares in Cokal.

Cokal said in a statement that under the offer, Cokal shareholders will be given the choice of scrip or cash consideration, comprising either:
? (share-based consideration) 10.327 CKRA shares for every 1 Cokal share; or
? (all cash consideration) A$0.16 per Cokal share.

The closing price of CKRA shares on the Indonesia Stock Exchange was Rp 1,751 on April 28, 2015 and Rp 139 on February 26, 2015 (being the last date on which Cokal shares were traded on ASX before announcement of CKRA?s indicative takeover proposal).

The cash consideration values Cokal at approximately A$75.45 million and represents:
? a 81.8 percent premium to the last traded price of Cokal shares on ASX on April 28, 2015 of 8.8 cents; and
? a 68.4 percent premium to the last traded price of Cokal shares on ASX on February 26, 2015 (being the last date on which Cokal shares were traded on ASX before announcement of CKRA?s indicative takeover proposal) of 9.5 cents.

Cokal said in the statement that CKRA intends to raise approximately US$100 million by way of a rights issue fully underwritten (as a standby buyer) by PT Sinarmas Sekuritas. ?CKRA has advised Cokal that discussions are well advanced with the proposed underwriter and CKRA is confident of securing the necessary underwriting support,? the Cokal statement said.

It added that at the same time, CKRA has advised Cokal that the proposed capital raising and offer is novel for an Indonesian listed company and that there are likely to be new regulatory issues which will need to be worked through with the Indonesian authorities, CKRA's shareholders and investors.

CKRA is an Indonesia-based investment company primarily engaged in mineral industry. It currently operates its business through its subsidiaries which engages in iron ore mining and which produces zircon sand. It is also in the process of developing a Nickel Iron processing operation. CKRA wishes to build an Indonesian resource and mineral processing company and is actively seeking opportunities to acquire companies with good fundamental assets and strong management and provide it the necessary financial ability and corporate support to grow these assets into positive cash flow sources.

CKRA is working with and is supported by PT Sinarmas Sekuritas which is part of the Sinar Mas Group, one of Indonesia's largest conglomerates, with considerable reputation in Indonesia and financial substance.

CKRA's objective for Cokal is to develop a sustainable mining asset and create shareholder value and maximize shareholder returns, the Cokal statement said.

"CKRA's first priority for Cokal is to provide the financial and corporate support to bring Cokal's BBM coking coal project into production,? Boelio Muliadi, President Director PT Cakra Mineral Tbk said in the statement, referring to the Central Kalimantan coking coal project.

The CKRA Offer also provides Cokal shareholders with a number of benefits including:
? A significant premium to the current value of Cokal shares and the value immediately prior to the receipt of CKRA's indicative proposal in February 2015.
? The ability to accept either CKRA shares or cash to suit each Cokal shareholder's personal situation.
? If the share-based consideration is accepted, the ability to participate in the development of the BBM Project and obtain exposure to the energy and resources sector in Indonesia generally through the identification, development, ownership and operation of future resource project in the area.

Editing by Reiner Simanjuntak