Vallar to pay 3 billion dollars in Indonesian coal tie-up

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British investment firm Vallar will pay three billion dollars in a deal that bundles together Indonesia's largest and fifth-largest thermal-coal producers ahead of a London listing, a statement said.

Vallar, the publicly traded investment unit set up by financiar Nathaniel Rothschild, has pledged to buy 25 percent of Bumi Resources and 75 percent of Berau Coal Energy for a combined three billion dollars in cash and new Vallar shares.

Indonesia, which is the world's largest exporter of coal used in power stations, has benefited from its proximity to both India and China, both with booming demand for energy.

Under the deal -- effectively a reverse takeover -- Bumi's holding company Bakrie & Brothers and other Bakrie affiliates will be the largest combined shareholder in Vallar, with 43 percent of Vallar shares.

Vallar plans to finalize the deal and list the company on the London Stock Exchange under the name of Bumi PLC no later than April next year.

"This transaction is a win-win deal for Vallar and Bakrie, which includes (holding company) Bakrie & Brothers and its shareholders," Bakrie & Brothers CEO Bobby Gafur Umar said in a statement.

The deal would produce the "primary global mining company from Indonesia," he added.

The transaction, however, will still need approval from the Indonesian government.

The Bakrie Group, which is controlled by the family of billionaire and politician Aburizal Bakrie, will have the right to choose directors including the chairman, chief executive and chief financial officer and will continue to manage Bumi.

Bumi and Berau are forecast to produce a combined 78 million metric tonnes of coal this year and together own more than 12 billion tonnes of coal resources.

A subsidiary of Bumi Resources, Bumi Resources Minerals, aims to have an initial public offering on the Indonesian bourse this year.

-- Dow Jones Newswires contributed to this story --

© 2010 AFP

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