Vallar in a $3bn Asian coal deal

City A.M. Reporter
INDONESIA’S powerful Bakrie family has joined forces with the Rothschild banking dynasty to cement its dominance of Indonesia’s booming coal exports sector through a London-listed company.

The deal combines stakes in three companies. Bakrie Group, run by the family of politician and tycoon Aburizal Bakrie, is joining miner Berau Coal with prize asset PT Bumi Resources in a share swap deal with Vallar – the mining investment fund established by financier Nathaniel Rothschild earlier this year.

Bakrie will gain majority control of London-listed Vallar and rename it Bumi, a symbol of a move that means Indonesia’s biggest coal producer gains a greater share of the global market.

“This is a reverse takeover where the Bakrie Group is regrouping its coal mining assets,” said Norico Gaman, the head of research at Jakarta brokerage PT BNI Securities. “Vallar is only a vehicle for the Bakrie Group to consolidate its assets.”

“Bumi is now aiming to become one of the biggest global players in the coal industry,” Gaman added.

As part of the deal, Vallar will pay $3bn in cash and new shares to buy a 75 percent
stake in Berau and 25 per cent of Bumi in its first deal since raising $1.1bn and listing in July.

“We’ve announced the creation of an Indonesian coal champion... (that) is going to be the largest supplier of thermal coal to China,” Rothschild said.

China’s total imports in 2009 were a record 126m tonnes, triple the 2008 level.

Bakrie Group will own 43 per cent of Bumi, while 28.3 per cent will be owned by exisiting Vallar ordinary shareholders.