UFS plans to acquire ARMS

By Romel S. Gurky

A day after Asia Coal Energy Ventures Limited (ACEV) announced its intention to acquire LSE-listed mining firm Asia Resources Minerals Plc, SGX-listed United Fiber System Limited (UFS) entered on Wednesday into a non-binding memorandum of understanding (MOU) with ASM Administration Limited (ASM), the sole owner of ACEV, pursuant to which UFS contemplates making an investment into ARMS, subject to the execution of definitive agreements.

ARMS is a major international mining group that is listed on the London Stock Exchange, which is engaged in exploration, development, mining and delivery of coal. ARMS operates its coal mines through its IDX-listed subsidiary PT Berau Coal Energy Tbk.

ACEV is a discretionary fund managed by Argyle Street Management Limited, a Hong Kong-based hedge fund.

UFS said in a statement issued on Wednesday provided the following details of the MoU with ASM.

Terms of Investment
ACEV has announced its intention to make an offer (the ?Offer?) for all the issued and paid-up ordinary shares in the capital of ARMS other than those already owned, controlled or agreed to be acquired by ACEV (?Offer Shares?) in accordance with the City Code on Takeovers and Mergers (?Code?).

Under the terms of the MOU, the Company contemplates acquiring from ASM, and ASM contemplates selling to the Company, the entire issued and paid-up share capital of ACEV, on such price that is no less favourable than when ACEV acquired the Offer Shares pursuant to the Offer (?Proposed ACEV Acquisition?), taking into account any professional fees and associated costs reasonably incurred by ACEV pursuant to the Offer.

The Proposed ACEV Acquisition will be subject to, inter alia, the following conditions precedent:
(a) the Company being satisfied with its due diligence investigations into the financial, legal, tax and business of ARMS and ACEV;
(b) Completion of the proposed acquisition of 66.9998% of PT Golden Energy Mines Tbk by the Company (?UFS RTO?);
(c) Completion of the placement of shares in the Company to comply with the minimum public float requirements in the listing manual of Singapore Exchange Securities Trading Limited following completion of the UFS RTO;
(d) The resolutions of shareholders of the Company having been obtained for the Proposed ACEV Acquisition (as applicable); and
(e) All necessary consents, approvals or waivers from any relevant governmental or regulatory authority or agency having jurisdiction over the Parties in relation to the Proposed ACEV Acquisition having been obtained (as applicable).

Each of the Company and ASM agrees that it shall not, and shall procure that their respective concert parties shall not, make any other acquisitions of shares in ARMS without the prior written consent of the other party, save as pursuant to the Offer and the Proposed ACEV Acquisition.

Editing by Reiner Simanjuntak