Leading Indonesian family behind rival to Rothschild bid for Arms

One of Indonesia's richest family-owned businesses has emerged as backer of a possible offer for Asia Resource Minerals, the distressed London-listed mining group which is subject to a refinancing offer led by a leading shareholder, Nat Rothschild.

On Tuesday, Argyle Street Management, a Hong Kong-based minority shareholder, said it would back an 11th-hour attempt to put together an alternative to Mr Rothschild's plan to renegotiate $950m of debt with bondholders on less onerous terms and inject $100m of new funding into Arms, formerly known as Bumi plc.

The grouping, led by the offshore vehicle Asia Coal Ventures, said it had the support of Sinarmas Group, one of Indonesia's largest conglomerates. It is run by the Widjaja family, which controls net wealth of $6bn according to a recent ranking by Forbes.

Backers of the bid said a possible cash offer would value the company's equity at £99m ($146m), or 41p a share if accepted by shareholders and lenders.

Shareholders and bondholders of Arms are close to voting to approve an offer - already on the table - of a cash injection by Mr Rothschild. Shares closed at 15p on Tuesday, valuing the company at £36m.

Mr Rothschild has re-emerged as a leading force at the scaled-back venture following a protracted dispute and unravelling of assets amid public mud-slinging with his former partners, the Bakrie Group, that has marked the demise of an attempt to build a world-leading coal producing venture in Indonesia.

On Tuesday, he declined to comment on the launch of a proposed rival refinancing offer which is pitched to deliver an enhanced exit for shareholders.

However, a source close to the situation queried the timing of a possible offer and the source of the funds, when most shareholders and bondholders had appeared to have signed up for the deal put forward by Mr Rothschild. In spite of Arms' languishing share price, the conclusion of the current refinancing deal is expected to result in an improvement in its share price once short-term financing problems are removed.

Leading bondholders including Ashmore, Pimco Taconic and Fidelity are understood to have already committed to the terms of Mr Rothschild's offer. Raiffeisen Bank, which has seized control of a 24 per cent stake previously controlled by Samin Tan, Bumi's former chairman, has also thrown its weight behind the bid.

Kin Chan, a partner at Argyle Street Management, insisted his approach had a chance of derailing the refinancing terms on offer from Mr Rothschild, saying: "We welcome the involvement of a group of the stature of Sinarmas as a 'white knight' to this key Indonesian asset."

However, an official statement from Arms on Tuesday evening said it had received no communication from its suitor on a possible offer.

A source close to the situation said: "In a real offer you would 'see the money' and know the identity of the buyer. Tonight's statement from the Arms' board shows they know neither."

Shareholders vote on whether to accept the terms of the refinancing deal next week, although electronic voting closes later this week.

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