Nat Rothschild’s refinancing plan for Asia Resource Minerals (LON:ARMS) could be in doubt after a vehicle, backed by a major Indonesian coal conglomerate, said it was considering its own takeover bid.
Asia Coal Ventures (ACE), a vehicle managed by Hong Kong-based hedge fund Argyle Street Management, already owns 4.5% of the troubled coal miner but wants to buy the business.
Funding is being provided by the Sinarmas Group, owned by tycoon Eka Tjipta Widjaja. Sinarmas has a Jakarta-listed coal mining unit, PT Golden Energy Mines, and owns some power stations.
ACE said the takeover offer would also include a US$150mln equity injection and bond restructuring component, helping to recapitalise the company, which has nearly US$1bn worth of debt.
It added that a current proposed debt deal, backed by billionaire financier Nat Rothschild who founded the company, is not in the interests of ARMS shareholders or bondholders.
However, sources close to Rothschild described the shell company's proposal as "completely uncertain".
Asia Resource Minerals has struggled with executive battles and tumbling coal prices and last month it reached an agreement with bondholders to restructure notes due in 2015 and 2017.
A trust of Rothschild has agreed to underwrite a US$100mln rights issue to help ARMS renegotiate US$950mln of bonds and avoid default after he won a shareholder vote against former chairman Samin Tan, who tried to gain control of the company’s board.
Cato Stonex, fund manager at Taube Hodson Stonex, said: “Mr Rothschild’s proposal is worth supporting because there is potential for a substantial recovery if we get better governance at the company.”
ARMS shareholders will vote on the funding proposals by Rothschild’s NR Holdings on April 22.
Shares in Asia Resource Minerals shot up 80% this morning to 26p, as investors reacted to the potential move.