The bitter dispute over the future of Asia Resource Minerals (Arms) was finally resolved yesterday after Nat Rothschild backed out of the firm he co-founded five years ago.
Rothschild, through the fund NR Holdings, announced his intention to sell his 17.2 per cent stake in the struggling miner after attempts to wrest back control of the firm failed.
Describing his fund’s bitter involvement with Asia Resource Minerals as “our first and last investment in Indonesia’s coal sector”, Rothschild said he would sell his stake to Asia Coal Energy Ventures (Ace) for 56p per share.
The sale nets the investor £23m, and represented a 52 per cent premium on Friday’s closing price of 36.7p per share.
Despite this premium, the share price represents a fraction of the £14 per share highs reached by the company shortly after it had originally been formed under the name Bumi, which means earth in Indonesian
Rothschild had sought to gain control of the company since November, before stating his plans to underwrite equity in the firm at 25p per share and expand his stake.
However, Ace, which is run by the powerful Widjaja family, undermined his offer with their own £98.8m bid at the start of May, originally valuing the company at 41p per share.
At the time, Fuganto Widjaja urged shareholders to reject Rothschild’s offer saying: “Once Nat has control... minority shareholders get diluted, and there’s no way out.”
Although there was speculation of a combined counter bid from Rothschild involving the Russian Siberian Coal Energy Company, he failed to secure enough backing from shareholders, who began to move towards the Ace bid.
Yesterday Rothschild, who described Indonesia as “ungovernable,” said the outcome was good for investors, adding: “It is the best short-term outcome given the difficulties that Asia Resource would have faced had it attempted to recover, via a lengthy and costly litigation process, the $173m that was misappropriated by the former Indonesian controlling shareholders and management of this company.”
Ace spokesman Fuganto Widjaja, praised Rothschild for his handling of the deal, saying: “Ace and Sinarmas are delighted to have received this irrevocable undertaking from the honourable Nathaniel Rothschild and NR Holdings. We are grateful to Rothschild for his good faith and professionalism in all our dealings.”