Asia Resource inks support deal, sets meeting on open equity offer

By Caroline Salls

Pittsburgh, March 31 – Asia Resource Minerals plc will hold a general meeting on April 22 in connection with its previously announced open equity offer to be completed as part of its recapitalization, according to a news release.

The company said a prospectus related to the open offer and to its proposed notes exchange was published on Tuesday.

Asia Resource said its board of directors believes the recapitalization provides a solution that not only addresses the upcoming repayment requirements in July for 12½% guaranteed senior secured notes due 2015 issued by Berau Capital Resources Pte. Ltd. and the 7¼% guaranteed senior secured notes due 2017 issued by PT Berau Coal Energy Tbk.

The recapitalization is also expected to result in a reduction in the company’s borrowing and annual interest charge, an improvement to the company’s ability to withstand potential continued weakness in the coal price and a stronger platform for the company to complete its business review and continue to streamline Berau Capital Resources’ operations for current low coal prices.

As previously reported, the recapitalization is proposed to be executed through separate, but interconditional, transactions to raise 67.8 million of new equity under the open offer, repay $118.75 million of old notes using proceeds from a $95 million loan to Berau from Asia Resource and cash held at Berau and exchange the 2015 notes and 2017 notes with new notes issued by the Berau Group through a Singapore scheme of arrangement.

The open offer is being underwritten by NR Holdings, the release said.

Asia Resource said it is targeting completion of the recapitalization by the end of June.

Key dates for the open offer include a March 26 record date for entitlements, an April 1 ex-entitlement date and an April 20 deadline for completed application forms and payment in full under the open offer.

Restructuring support agreement

In addition, the company said it reached an agreement with the advisers of a steering committee of noteholders on the terms of the notes exchange and Singapore scheme.

Each noteholder that executes the restructuring support agreement will be paid a consent fee equal to 0.2% of the principal amount of notes held by that noteholder at the record date for the Singapore scheme. An additional early-bird fee of 0.2% of the principal amount will be paid to any noteholder that executives the agreement by April 15.

The company said shareholders will be asked to vote on three resolutions at the April 22 meeting:

• Resolution one looks to enable the directors to allot relevant securities up to a maximum amount of £2.71 million under the open offer;

• Resolution two seeks approval from independent shareholders of a waiver of an obligation for the NR Concert Party to make a general cash offer for the ordinary shares not already owned by it; and

• Resolution three seeks approval from shareholders to enter into a new NR relationship agreement.

Asia Resource said its board has also established an internal working group to evaluate the best strategy for the business going forward. The working group aims to submit its report to the board in time for its conclusions and its recommendations as to their implementation to be shared at the annual general meeting in June.

Asia Resource Minerals, formerly Bumi plc, is a thermal coal company based in London.

© 2015 Prospect News.
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