Asia Resource’s owners propose end to UK listing

JAKARTA. The Indonesian majority shareholders in London-listed Asia Resource Minerals plc have proposed the delisting of the company from the UK stock exchange, which would enable them to gain direct ownership to its only asset — Jakarta-listed PT Berau Coal Energy.

Asia Resource said its 47.6 percent owner, PT Borneo Lumbung Energi & Metal, and its related entity Ravenwood Acquisition Company Limited (RACL), had submitted a proposal offering the London company to be delisted from the stock exchange and its shares in Berau to be distributed to its shareholders.

“Asia Resource Minerals announces that a number of the company’s major shareholders, including RACL and Borneo, have indicated a clear wish for the company’s shares in Berau to be distributed in specie to shareholders, on the basis that they believe simplified ownership will ultimately remove the need for a London-based management team and listed vehicle,” the company said in a statement.

It added that RACL and Borneo argued that the change in ownership structure would reduce cost, increase value and allow the distribution of US$500 million cash in the London company.

Asia Resource, previously named Bumi plc, now holds a 84.7 percent stake in Berau, one of the major coal producers in Indonesia. 

Berau is the only Asia Resource asset after concluding earlier this year to release its stake in another Indonesian coal digger PT Bumi Resources.

Asia Resource said it would undertake a review of the proposal as some other shareholders had indicated a preference for the current ownership structure. 

The company said it would give a decision by June 3. Should the proposal go through, RACL and Borneo as well as other Asia Resource shareholders would have direct ownership — a change from the current indirect ownership — in Berau.

RACL and Borneo will then hold around a 40 percent direct stake in Berau, according to Borneo president director Alexander Ramlie.

“We propose this de-merger for efficiency and we hope to no longer see a layer between shareholders and Berau. Let’s just make the listing to be only in Indonesia, as another listing in London [through Asia Resource] means double costs,” Alexander said over the telephone.

He said there were no plans to merge Borneo, which runs a hard coking coal mining business through subsidiary PT Asmin Koalindo Tuhup, with Berau.

“Our intention is how to be as efficient as we can because the price of coal remains low. We need to maximize Berau,” Alexander said.

He added that he expected the proposal would be passed and the de-merger would be completed by the end of June.

Despite the planned change, Alexander said, lingering issues in Asia Resource would continue to be resolved, including an arbitration against Indonesian businessman Rosan Roeslani, the former director of Berau who stands accused of misusing funds.

The de-merger proposal has driven more attention to Asia Resource, which suffered a plunge in its share price following a dispute involving previous shareholder the Bakrie Group and British financier Nathaniel Rothschild. 

Shares in Berau, traded on the Indonesia Stock Exchange (IDX) under the code BRAU, were closed at Rp 116 apiece on Wednesday, inching up by 0.87 percent from a day earlier. 

Meanwhile, other major coal miner PT Bumi Resources, which owns majority stakes in big coal miners PT Kaltim Prima Coal and PT Arutmin Indonesia, is aiming for Rp 6.54 trillion ($565 million) from selling new shares. It plans to sell 26.17 billion new shares priced at Rp 250 apiece.