----- Forwarded Message ----
Vallar Announces Major Reorganisation
Friday, June 10, 2011
Vallar announces today the intention to acquire a 75 per cent. holding (on a
fully diluted basis) in BRM from Bumi Resources. The acquisition price of
Rp.850
per share represents a 21.9 per cent. premium to BRM's thirty day average
closing price of Rp.697 per share to 27 May 2011 and a total consideration of
approximately US$2.07 billion paid by Vallar, through its proposed new parent
company Bumi plc, to Bumi Resources in the form of listed convertible bonds,
which are convertible into new Bumi Voting Ordinary Shares (the "Convertible
Bonds").
The key terms of the Convertible Bonds will be as follows:
* Issuer: a wholly-owned subsidiary of Bumi plc
* Guarantor: Bumi plc
* Currency: US$
* Underlying shares: Bumi Voting Ordinary Shares
* Listing: Official List of the FSA and trading on the Professional
Securities
Market of the London Stock Exchange
* Maturity: five years and six months from the Issue Date (the
"Maturity Date")
* Cash coupon: 2.0 per cent. per annum, payable semi-annually in arrear
commencing on the date that is six months after the Issue Date
* Conversion price: £15.88, representing a 21.9 per cent. premium to
the thirty
day average Vallar Voting Ordinary Share closing price of £13.03 per share to
27
May 2011
* Conversion period: from 40 days following the Issue Date until the
fourteenth
calendar day prior to the Maturity Date. No Convertible Bond is convertible
when
held by or on behalf of Bumi Resources
* Issuer call: non-callable for three years following the Issue Date.
Thereafter callable at par plus accrued interest provided that the Bumi Shares
are trading at 130 per cent. of the conversion price for a period of 20 out of
30 trading days.
The Convertible Bonds will be convertible into a maximum of approximately 79
million new Bumi Voting Ordinary Shares at the initial conversion price.
The BRM Proposal is expected to complete in the third quarter of 2011 and will
require approval of Bumi Voting Ordinary Shareholders. Bumi proposes to engage
with the Indonesian regulator to review whether a mandatory tender offer for
the
remaining shares in BRM would be required as a result of the reorganisation.
Simplification of corporate structure
The BRM Proposal will result in the simplification of Vallar's corporate
structure by providing the Company with direct exposure to the BRM portfolio.
In
addition, the BRM Proposal will benefit Vallar through stronger corporate
governance across the group.
Creation of enhanced asset portfolio with access to attractive commodities in
emerging markets
Through the BRM Proposal, the Company will augment its core focus on coal by
adding a portfolio of base metals, iron ore and precious metals assets across
multiple geographies. Vallar believes in the asset quality and competitive
strengths offered by BRM and the robust industry fundamentals of copper,
zinc-lead, iron ore and gold underlying the business.
BRM's 18.0 per cent. economic interest in Newmont Nusa Tenggara ("NNT"), the
company that owns the Batu Hijau mine, offers exposure to a significant
interest
in a world-class, high quality, long-life copper and gold mine. BRM's
attractive
portfolio of development projects, including its 80.0 per cent. holding in the
Dairi Prima zinc-lead project, offers attractive near term revenue growth
opportunities whilst its exploration projects offer significant additional
growth opportunities.
Platform to execute a diversified mining expansion strategy
The BRM Proposal will diversify the Company's current geographical and
commodity
footprint, allowing Vallar to benefit not only from strong fundamentals and
assets in the coal sector, but also the value creation potential in early stage
development and exploration assets. Furthermore, gaining direct exposure to BRM
offers Vallar the strategic flexibility in the development of the BRM assets,
whilst simultaneously increasing BRM's financing options to develop its
projects.
Best use of management to deliver value to shareholders
BRM's management will continue to play a critical role within the enlarged
Company and will allow Vallar to align the management of the enlarged Vallar to
best utilise management's strengths across the entire business portfolio. Given
the scale and unique opportunities offered by the Company, it is the intention
of the Vallar board of directors and management to further attract additional
world-class talent.
Continued delivery on Vallar strategy
The BRM Proposal represents a continuation of the delivery of the Vallar
strategy announced at the time of its IPO to seek to create shareholder value
through establishing a business with significant operations in the global
metals, mining and resources sector with the intention of increasing its scale
and profitability by efficiently deploying capital to expand and enhance
current
operations and by recruiting and retaining experienced and specialist industry
personnel for key management positions.
