Apr 11, 2011

Vallar: No cash purchase on Bumi stake

Vallar Plc, a London-based publicly listed company, currently doesn't has any plan to purchase additional shares in PT Bumi Resources Tbk (BUMI) from the market in a bid to increase shareholding up to 50%. Vallar aims to boost stake in Bumi via shares swap from May 10 onwards.
Daren Morris, one of Vallars' four founders, said Vallar will swap 57.7 of Bumi shares for one Vallar share. "At this moment there are no plans to purchase shares of Bumi in cash from the market," he said today.
According to him, Vallar is scheduled to issue its shares on May 10, so that the company will carry out the step-up transaction as soon as possible.
In a prospectus issued by Vallar in February, the company said the step up transaction to increase its equity interest in Bumi to be at least lower than 51%. However, the prospectus did not explain in detail about the mechanism of the action.
"With that scenario, we may eventually have 50% of Bumi share. It will strengthen the cooperation between Bumi and Vallar," said one of Vallar’s founder Rothschild in a press conference, yesterday.
Vallar agreed to buy 25% stake in Bumi and 75% stake in PT Berau Coal Energy Tbk (Brau) worth a total of US$3 billion in November last year through a combination of share swap and cash purchase.
On 4 March, Bakrie Group, PT Bakrie & Brothers Tbk (BNBR) and Long Haul transfered 25% stake of Bumi or 5.19 billion shares at a price IDR2,500 to Vallar. 
Meanwhile, PT Bukit Mutiara, which controlling 90% shares in Berau Energy, also transfered 75% stake in Berau Energy or 26.17 billion shares at Rp540 per share to the London-based company on last Friday.
Instead, Bakrie Group and Bukit Mutiara received new shares of Vallar as much as 54.6% and 13.2% respectively. To provide Bumi shares to Vallar, Bakrie & Brothers borrowed US$601 million from Credit Suisse Singapore by pawning Vallar new shares. In that transaction, Bakrie & Brothers received 49.39 million Vallar shares.
Vallar, which will change its name to Bumi Plc, is expected to be listed on FTSE 100 Index in London Stock Exchange on May.
Bumi yesterday was down 0.77% to Rp3,225 per share, while Vallar Plc fell 1.15% to Rp182,000 in London Stock Exchange, and Berau Energy was stagnant at Rp560 in Indonesia Stock Exchange. 
Referring to the swap ratio and Vallar's today price, Bumi shares might be swapped at Rp3,150 per share, below today's closing level.

Disclosure: No position at the stock mentioned above.

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