Nov 10, 2010

The last talk on Noble, Berau Coal deal

Indonesia's fifth largest coal miner PT Berau Coal has mandated Noble Group Limited, one of the world's biggest commodities players, as the exclusive marketing agent for coal products to international markets excluding Japan and Malaysia.
The problem is Berau Coal has also picked Maple Holding Pte Ltd as the exclusive marketing agent for the coal products.
Despite unclear situation who is the real exclusive marketing agent for Berau Coal, the appointment of Noble Group, which is 15% stake owned by China Investment Corporation (CIC), largest creditor for PT Bumi Resources Tbk (BUMI), gives a strong hint that Noble would win Berau Coal Energy's disposal tender. 
A source familiar with the matter said Noble Group would be the buyer for 35% stake in Berau Coal Energy. Still, the acquisition price is negotiated between Noble and the seller PT Bukit Mutiara.
"The possibility that Noble could acquire Berau Coal Energy is 90%, beating three other contenders San Miguel, Huatian, and one Chinese buyer," the source said.
The source said Bukit Mutiara has proposed the price at the range of Rp570-Rp580/share for 35% stake in Berau Coal Energy. However, Noble has come with the consideration purchase price of Rp520/share.
"Referring to the price gap, it seems that the price is narrow to the range of Rp540-Rp550/share," the source said.
Shares pledge
Besides the sale and purchase deal, don't forget that Bukit Mutiara has pledged about 18.77% stake in Berau Coal Energy to Avenue Luxembourg S.A.R.L. regarding to US$50 million loan facility.
In Berau Coal IPO prospectus submitted to Indonesia Stock Exchange (IDX), to secure the loan facility, Bukit Mutiara has pledged 18.77% stakes in Berau Energy to Avenue at a minimum value of 2 times of the loan.
Bukit Mutiara is also in talks with Avenue in a bid to obtain additional loan facilities and provide more shares to pledge.
Bukit Mutiara controls 90.257% stakes in Berau Energy, PT Bentara Energi Asia holds 0.001% stakes, and public holders own 9,742% stakes. 
Berau Energy offloaded 3.4 billion shares, 9.742% of its total outstanding 31.5 billion shares, into the primary market at Rp400 per share.

Disclosure: No position at the stock mentioned above.

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