Mar 15, 2011

Vallar seeks higher stake in BUMI

Vallar Plc prospectus containing 712 pages has revealed several 'missing link' information on Bumi Resources Group (BUMI) and Berau Coal Energy Group (BRAU). 
The prospectus has disclosed a 23-day labor strike at Bengalon mine during August-September last year, generating an estimated loss in coal production of 560,000 tons.  
Using average realized price as mentioned at Vallar prospectus page 190, US$96.39 per ton as of September 2010, the estimated potential loss is approximately US$53.98 million.
Regarding to the labor strike, so far  I can't find any disclosure submitted to Indonesia Stock Exchange (IDX) both by Bumi Resources nor by Darma Henwa. Will you help me to find such disclosure information at IDX? 
However, page 61 of the prospectus has also revealed a so-called Step-Up Transaction. It is said that Vallar will seek to increase its holding in Bumi Resources over and above the 25% stake it has been acquired as part of Bumi Resources Transaction.
Vallar Plc expects that it will seek to increase its holding in Bumi Resources over and above the 25% stake it will acquire as part of the Bumi Resources Transaction. 
Vallar intends to achieve this by means of one or more potential transactions, whereby Vallar would issue New Vallar Voting Ordinary Shares in return for outstanding Bumi Resources Shares to increase its aggregate holding in Bumi Resources to not more than 51% of the issued ordinary share capital of Bumi Resources. It is called the Bumi Resources Step-Up Transaction.   
The completion of any purchase of further Bumi Shares by Vallar in the Step-Up Transaction will be conditional upon the publication of a supplementary prospectus or a further prospectus containing, among other things, details of the purchase including its terms.At the Bumi Resources Transaction Closing Date, the Bakrie Group will hold approximately 28.9 million voting ordinary shares and approximately 61.2 million suspended voting ordinary shares (together
constituting approximately 29.9% of the voting rights in Vallar and approximately 57.2% of the total issued ordinary share capital of Vallar.). 

Disclosure: No position at the stock mentioned above.

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