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Nathaniel Rothschilds Asia Resource Minerals Inching Its Way To Resolving Shareholder Conflict

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Asia Resource Minerals Plc just made a rather complicated announcement about its twice-delayed attempts to untangle itself from direct holdings by the Indonesian Bakrie group.

The Bakrie Brothers  have it seems now formally stated to the company that it has raised US$163 million rather than the US$228 million required to complete what is known as the proposed “Separation Transaction” on its original terms.

Under the Separation Transaction the Bakrie family interests are supposed to buy the company’s 29.3% interest in mining affiliate PT Bumi Resources, then sell their own shares in Asia Resource Minerals to entities controlled by the company’s Chairman, Samin Tan (and participated in by the Bakries as well), for US$223 million.

Since they have raised less cash the Bakries would now like to buy only 25.4% of Bumi Resources instead, at a price proportionately lowered from its original US$501 million to just US$436 million, still leaving the other parts of the deal intact.

The Bakries have already made a US$50 million good faith deposit to Asia Resource Minerals. Chairman Samin Tan’s company Borneo is itself scheduled to pay US$223m to the Bakrie Group for the acquisition of all of their directly held Asia Resource Mineral shares. When you add both of these sums to the US$163m of new money which the Bakrie Group has stated that it has now raised, then the total consideration required to close the deal on such a revised basis is indeed now available for the Bakries. This would then leave Asia Resource Minerals with a residual 3.9% holding in Bumi Resources until such time as it can sell those shares on the market in Indonesia.

Accordingly, Asia Resource Minerals states that the independent committee of its board believes in principle that if such revised terms are agreed, these would remain clearly in the best interests of shareholders. Of course what else really can they say at this point, in order to get it done?

The independent committee therefore intends to agree a further extension to the date by which certain conditions precedent to the Separation Transaction have to be satisfied, from its current February 21st to 26 February 2014, so that everything can formally be put together correctly.

In other words, no closing on Friday as was supposed to happen, but let’s come back again next week and hopefully it will all be done. Still a significant shareholder, Nathaniel Rothschild will be much happier when the company can get its focus back to the more mundane business of running a coal mining operation, and begins to restore its share price once again. Today Asia Resource Minerals shares jumped almost 5% with this announcement, as expectations rise that the shareholder disputes do now seem to be inching their way to a resolution finally.

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