SINGAPORE (June 8): The Sinar Mas Group will become the largest shareholder of Asia Resource Minerals (ARMS) through Asia Coal Energy Ventures (ACE), subject to all regulatory approvals.

ARMS’s main asset is an 84.7% stake in PT Berau Coal Energy, the fifth largest coal company in Indonesia by reserves.

ACE has a memorandum of understanding to offer PT Berau Coal to Golden Energy and Resources (GEAR).

GEAR already owns Golden Energy Mines, the 10th largest coal company in Indonesia by reserves.

On June 8, ACE agreed to raise its bid for ARMS from 41 pence to 56 pence per share, representing an increase of 36.6% over its initial offer, and valuing the total equity of ARMS at over US$200 million ($272 million).

NR Holdings, controlled by Nathaniel Rothschild, which holds 17.2% of ARMS, has accepted the offer. “This will be our first and last investment in Indonesia's coal sector,” Rothschild says in a statement.

ACE has also received from NR Holdings irrevocable undertakings not to interfere in the ARMS recapitalisation process, or the restructuring of US$450 million worth of bonds at PT Berau Coal that mature on July 8, or to impede the convening of the EGM to vote on the terms of the RBI Loans.

Last month, ACE had already received irrevocable undertakings from Raiffeissen Bank International for its 23.8% stake in ARMS.  

ARMS, formerly known as Bumi PLC, was created by Rothschild.

In Nov 2010, he had formed a company Vallar which raised £700 million ($1.45 billion) in an IPO on the London Stock Exchange.

Vallar was renamed Bumi PLC after it acquired stakes in PT Berau Coal and Bumi Resources owned by Indonesia’s Bakrie family.

But Rothschild soon became embroiled in bitter disputes with the Bakries over accounting irregularities, and resigned from the company’s board in 2012.

The Financial Times has estimated Rothschild lost about £80 million in his Indonesian coal adventure.

Golden Energy and Resources last closed at 80 cents.