Swiss commodity group in line to become minority shareholder in company headed by Nat Rothschild
Glencore could become a minority shareholder in a leading Indonesian coal company formed last year by billionaire investor Nat Rothschild and Indonesia's influential Bakrie family.
Swiss-based Glencore, the commodities trading group, which floated on the London stock market in May raising $10bn (�6.4bn), is understood to be in talks with the Bakries about taking a stake in Bumi plc, where Rothschild is co-chairman.
The talks have been prompted because the Bakries need to refinance a $1.35bn loan, arranged by Credit Suisse, which was pledged against their 47% stake in Bumi, which controls more than 3bn tonnes of coal reserves. The Bakrie empire, spearheaded by leading politician and presidential candidate Aburizal Bakrie, spans half a dozen industrial companies listed on the Indonesian stock exchange.
But the Bakries are under pressure because Bumi shares have collapsed in the global commodities rout, prompting a crisis because the entire 47% stake was used as collateral for the Credit Suisse loan.
The Bakries must now sell assets to appease their bankers. According to well-placed City sources, Glencore is offering to help refinance the loan in return for all or some of the Bakries' equity in Bumi. If a deal is struck, it would be Glencore's most significant since its IPO.
As part of any deal, Glencore is also thought to want the Indonesians to give the Swiss preferential trading rights in other areas of the Bakrie businesses.
Glencore is not the only potential buyer in the frame for Bumi, according to sources, with TPG-backed Northstar also a bidder. But Glencore is viewed as the most likely partner for the Bakries, with analysts pointing to existing links with the family via a number of coal-marketing agreements and share swap arrangements.
Bumi plc was formed by Rothschild's Vallar cash shell in a series of complex deals late last year. Rothschild speaks for 10%.
Source: http://www.guardian.co.uk/business/2011/oct/11/glencore-commodities-coal-deal
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