Asia Resource Minerals postpones vote on emergency refinancing

Asia Resource Minerals, the Indonesian coal mining group cofounded by Nat Rothschild, has called off a crucial shareholder vote planned for Wednesday to approve the original terms of an emergency refinancing.

The adjournment proposal came after an announcement by Mr Rothschild late on Monday. The financier said he could be prepared to make a sweetened offer to remaining minority investors for the financially distressed group, once a refinancing package had been agreed at the scheduled meeting.

The postponement of the shareholder meeting also comes a week after the announcement of plans for a rival offer for Asia Resource backed by minority shareholder Argyle Street Management and Sinarmas Group, one of Indonesia's largest conglomerates.

Mr Rothschild's existing open offer for the company, announced in February, could see him lift his stake in the company to more than 60 per cent. Its terms involve his vehicle NR Holdings injecting $100m into the company through the issue of new shares at 25p, alongside an agreement with bondholders over the easing of terms on $950m of debt carried by the venture.

Backers of the rival putative approach have indicated they could offer 41p a share, valuing the company's equity at £99m, and inject $150m into the company if shareholders and lenders declined Mr Rothschild's underwritten offer.

In a statement on Tuesday, NR Holdings confirmed it could join forces with Suek, Russia's biggest coal mining group, to launch an improved but unpriced offer for remaining minority shareholders, once full agreement between equity investors and bondholders was achieved on Wednesday. Suek is controlled by billionaire Andrey Melnichenko, one of Russia's richest businessmen.

"NRH understands that certain shareholders may prefer to sell their shares at a premium to the current share price and not to remain long-term shareholders in [Asia Resource]," it said. "Any such offer made would be conditional upon the recapitalisation being completed."

A spokesman for Asia Resource's board said on Tuesday that the company would now seek an immediate adjournment of the shareholder meeting called in London on Wednesday while it assessed the options before investors. No date has been set for any reconvened meeting.

Shares in Asia Resource rose by close to a quarter to 35.51p on Tuesday, but still trade at a significant discount to the indicative price suggested by the Argyle-led consortium.

A source close to the rival consortium welcomed the postponement of the vote on Mr Rothschild's offer, which he described as a "crowd down" of other shareholders.

He added backers of the Argyle-led consortium were working towards making good on their approach. The fate of the company and shape of any refinancing deal, he suggested, now lay in the hands of two banks - Standard Chartered and Austria's Raiffeisen Bank - which effectively control nearly half of Asia Resource's stock and part of its debt.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation