Wealthy families from opposite sides of the world offer competing plans to restructure debt of Indonesian coal miner
HONG KONG—A battle between members of wealthy families from opposite sides of the world over an Indonesian coal miner on the verge of default will come to a head this week, the latest act in the drama surrounding London-listed Asia Resource Minerals PLC.
Leading the cast list of the superrich involved in the increasingly bitter struggle is 43-year old British financier Nat Rothschild, scion of the famous banking family, who is hoping to win back control of the company he first brought to the London market five years ago.
Asia Resource’s shareholders will vote Thursday on Mr. Rothschild’s proposal to inject $100 million into the company by underwriting a share issue that could take his stake in the company to around 60% from 17.5% now. Mr. Rothschild plans to pay off some of the company’s debt and restructure the rest by extending maturities and modifying the bonds’ interest rates.
Mr. Rothschild’s opponents are the billionaire Widjaja family, which doesn’t own a stake in Asia Resource but is hoping to keep its mines in Indonesian hands at a time of rising resource nationalism there, even as a plunge in coal prices in recent years that has prompted a nosedive in the value of the unprofitable company.
The Widjaja family’s efforts are spearheaded by 33-year old Fuganto Widjaja, grandson of family patriarch Eka Tjipta Widjaja, in partnership with hedge fund Argyle Street Management, a 4.7% shareholder in Asia Resource.
The Widjaja family’s Sinarmas Group, along with Argyle, last week confirmed a rival plan that involves funneling $150 million into Asia Resource via a specially formed investment vehicle, Asia Coal Energy. It says it will restructure the company’s debt in a way similar to that of Mr. Rothschild.
With Mr. Rothschild barred from voting his shares on Thursday, only half of the 83% of remaining shareholders are needed to derail his plan.
A spokesman for Mr. Rothschild said he welcomed the bid from the Widjaja family, saying the competition for Asia Resource would benefit shareholders.
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