Coal Industry Mega-Deal Leads To First Time London Listing

Online, December 5, 2010 (Newswire.com) - In a $3 billion cash and new shares deal , the British traded Vallar Plc (LON:VAA) will bundle together the assets of two Indonesian coal producing groups with Vallar Plc shares to create a new mining company to be listed on the London stock exchange as Bumi Plc. In this mega-deal Vallar will acquire 75% of of PT Berau Coal Energy and 25% of Bumi Resources, both companies traded on the Jakarta Stock Exchange. In 2011 Vallar plans the launch of a mandatory offer to the minority shareholders in Berau and in this way will raise its interest in the new Bumi group. The listing on the London stock exchange will be the first for an Indonesian company, and according to Indra Bakrie of Bumi, "The planned London listing "will enhance our international profile, provide a currency and platform for development in the region and put us in a much stronger position to build on the organic growth that our combined assets already provide".

Following the listing of the new company, Vallar shares will be suspended. Vallar Plc was founded by British financier Nat Rothschild, who will remain a large shareholder of the new company, holding 34% of the shares in the new company, although the name Vallar will no longer exist. 43% of the shares will be held by the Bakrie Holding company, Indonesia's largest coal mining group, and the remaining 23% stake will belong to Roslan Roslani, an Indonesian tycoon in the private equity sector.

Since 2005 Indonesia has been the world's largest exporter of coal for power stations, and in 2010 the prices for this fuel rose 40%. The combined production of the member companies in the group is expected to reach 140 million metric tons annually by 2013, making it the largest supplier of thermal coal to China. Purchases of Indonesian coal from China and India have driven up the demand for Indonesian coal, of which has the advantage of significantly cheaper shipping costs over coal from Australia, previously the largest exporter of power-station coal until 2005.

As the largest shareholder, Bakrie will have the right to nominate three directors - chairman, CEO and CFO. These positions will be filled by Indra Bakrie, Ari Hudaya and Andrew Beckham. Vallar founder, Nathaniel Rothschild, will co-lead the board with Indra Bakrie. Vallar's existing board members will remain. In addition a majority of Independent Non-Executive Directors will serve the company.
A number of financial advisors were involved in the Vallar-Indonesian transactions - J.P Morgan Cazenove for Vallar, and the Credit Suisse banking group for Bumi and the Bakrie group. South African born international businessman Paul Ekon, was also involved in the closing of the deal through his successful venture capital company.

The deal is expected to be concluded in April 2011. Analysts foresee that this deal will be well received by investors and has a strong investment appeal. The price will be good for coal assets of high quality and the new listing should offer unique commodity exposure.