JAKARTA -- British financer Nat Rothschild is selling his stake in financially troubled coal investment company Asia Resource Minerals to a group of investors led by Indonesian conglomerate Sinar Mas Group, marking his exit from the country.
Nat and his investment company NR Holdings have agreed to sell their 17.21% stake in Asia Resource to Asia Coal Energy Ventures, a company set up by Sinar Mas, Asia Coal Energy said on Monday. Asia Coal Energy increased its purchase price from the previous 41 pence ($0.63) per share to 56 pence per share, which values the stake at about 23.2 million pounds. The new offer represents a 307% premium to Asia Resource's 30-day volume weighted average price before Asia Coal Energy announced their intention to buy the company.
Asia Resource indirectly owns an 84.7% stake in Indonesia-listed coal producer Berau Coal Energy, which operates three mining areas in Indonesia. Asia Resource has been trying to raise funds in the face of a $450 million bond payment in July.
After the announcement, Nat told British newspaper The Telegraph that he will not invest in Indonesia's coal market again in the future. Nat, a member of the prominent Rothschild banking family, established Asia Resource (initially called Vallar) in 2010 in the midst of a booming commodity market. The company raised more than $1 billion from investors through an initial public offering in London and used the proceeds to buy stakes in Indonesian coal miners Berau Coal and Bumi Resources.
But Nat's investments turned sour as coal prices started to decline on weak demand from China, in addition to a series of disputes over mismanagement. Asia Resource's shares plunged by more than 90% between its IPO and the proposal by Sinar Mas.
Nat said the deal with Sinar Mas was a good outcome for investors.
In a news release, Fuganto Widjaja, a spokesman for Sinar Mas, said "we also look forward to restoring the long term prospects of the [Asia Resource] Group after the restructuring proposed by [Asia Coal Energy]."