Vallar Share Discussion Threads

[envirovision] 18/12/2010 20:41

well done guys i looked at it but never bothered to buy myself, stupid really.

[miti 1000] 17/12/2010 17:43

A few comments from alphaville on Vallar

NH
here's a recent note on that
NH
We understand that Vallar could resume trading as early as today following its suspension after the Bumi/Berau deals were announced. When it does re-list, investors will be looking at owning a company that has issued more than 2x its mkt cap of equity and spent c.US$0.7bn of cash to buy a 25% stake in the world's largest export thermal coal producer Bumi Coal (BUMI IJ) and 75% of fellow Indonesian exporter Berau coal (BRMS IJ). We calculate the mark to market SOTP for Vallar (to be re-named Bumi plc) is US$3.6bn, implying a share price of £10.60. Given Vallar was suspended at £9.73/shr we expect a strong open.
NH
from Liberum Capital
NH
Liberum site Bumi visit in Indonesia
Our team are on site in Indonesia now looking at both Bumi and Berau's assets and they like what they see. Both assets are large scale, low cost with very low capex/tonne expansion plans which will see capacity increase c.50% over two years and c.80% over 5 years. Cash margins in the past 12 months have been c.US$25/t on gross tonnages of 72mtpa (19.2m attributable to Vallar). We expect margins to recover strongly on coal pricing to c.US$35-45/t in 2011 – giving potential attrib EBITDA to Vallar of US$0.9-1.2bn. Since Bumi also owns a recently listed Minerals business too (attrib value to Vallar shareholders of c.US$0.3bn), this puts the company on attractive forward EV/EBITDA multiples of 4-5x.

We think the deal is a good one for Vallar and it could be a great one if: a) current strength in coal prices persist b) Vallar address governance/control concerns in Bumi/Berau in part by a further offer for Bumi minorities c) Vallar push to harvest operational and financing synergies which are thrown up by the deal. Either way Bumi plc is very likely to become a very interesting FTSE 100 coal company in 2011 and it is worth doing the work on it. We will write a more detailed view on our return.

NH
should be a contender for the FTSE 100 at the next review

[strollingmolby] 17/12/2010 09:34

Good to see the suspension of trading lifted - now getting to see how the market values BUMI.

[stuart14] 24/11/2010 11:25

Good guess I guess!!

[roman2325] 23/11/2010 17:23

How about BUMI LN?

[stuart14] 23/11/2010 17:18

Wonder what the ticker for Bumi will be? Any idea's?

[strollingmolby] 20/11/2010 11:09

Man in the News: Nat Rothschild

[utsushi] 17/11/2010 14:25

Well done Nat, looks like a good one, value and growth.

[stuart14] 16/11/2010 16:04

Yeah. Think i've posted it above somewhere!

[strollingmolby] 16/11/2010 15:18

Yes, just seen that NR will be Co-Chairman, Stuart. Am going through the full statement now to seek out info on the shareholdings post-acquisition. It's not jumping out at me - have you already found this/calculated it?

[stuart14] 16/11/2010 15:08

Well he'll personally have 4%. Vallar (this Vallar, rather than the new one) will control 38% of the group and will have all their current board members on the new board. Nat himself will be a joint Chairman won't he?

[strollingmolby] 16/11/2010 15:06

Am struggling to understand aspects of this RTO - such as Nat King Coal giving up much of his control of Bumi, nee Vallar. He'll have 4% of the company according to the article below, coupled with granting Bakrie Group the right to appoint Chairman, CEO and CFO roles.

[stuart14] 16/11/2010 14:49

Ha, sorry. Is that better now? It is a transcription of the Alphaville feed from the FT. Basically they say the deal is complicated, but will probably get a lot of fund interest. I think we'll make some money here!!

[roman2325] 16/11/2010 14:37

Stuart: post 49 is far too long for me. What does it say? Did you copy it off another board?

[stuart14] 16/11/2010 14:03

Vallar is to purchase 75% of Berau Coal energy and 25% of Bumi Resources for $3m made up of a combination of cash and new shares.

Indra Bakrie, proposed Chairman of Vallar, says: "Today's announcement will bring together the world class assets of both Bumi and Berau to create an Indonesian global mining champion and the only major Indonesian company to be listed on the London Stock Exchange.

"This will enhance our international profile, provide a currency and platform for development in the region and puts us in a much stronger position to build on the organic growth that our combined assets already provide. As a result, we expect to unlock significant value for shareholders."

The proposed acquisition is regarded as a "reverse takeover" and means the temporary suspension to trading in Vallar shares.

[stuart14] 16/11/2010 12:13

Comms supercycle play with a Rothschild at its prow will, I guess, be afforded a better rating round these parts than something in Indonesia no-one had heard of.

well they reckon it's just the start the base to create another Xstrata i'm not so sure but as far as I can tell the assets are good this from Liberum.

Vallar, Nat Rothschild's resources investment company, has this morning made its long awaited first acquisition. Via a reverse takeover, it is paying US$3bn in cash and new Vallar shares to acquire: i) 25% of PT Bumi, Indonesia's largest thermal coal producer, which produced 60Mt in 2010; and ii) 75% of PT Berau, Indonesia's 5th largest coal producer, which produced 17Mt of coal in 2010. Vallar states it will make a mandatory offer to Berau's minority shareholders and will increase ownership in Bumi in 2011 (but not to what levels). Vallar will now be renamed Bumi Plc and it will trade on London's Main Market.

It is interesting that given Vallar's "mini-Xstrata" aspirations, it has chosen to make its company founding acquisition in coal – we wonder if this is a case of history now repeating itself. With expected expansions at Berau, we estimate Vallar's attributable coal production in 2014 at 45Mt pa, which would be c.54% of Xstrata's current coal division, which is not bad for a standing start. With combined attributable 2010 EBITDA of US$620m Vallar is paying a trailing EV / EBITDA of 4.8x. Our view is that this acquisition should be well received by investors since this is a good price for high quality coal assets, plus a London listed, large scale, pure play Indonesian coal play should offer a unique commodity exposure and should have strong investment appeal


all our tracker funds will soon be owning a chunk of a London listed indonesia coal company controlled by some Indonesia family we have never heard of
and a Rothschild Bakrie Brothers are the people behind it and they recently had to sell a 5% stake in Bumi to Glencore because they needed some cash
It's a complex and rather incestuous world, mining.

[stuart14] 16/11/2010 10:46

This looks good to me!

[stuart14] 16/11/2010 10:07

So in effect we are doing 2 deals? This is confusing!!

[stuart14] 16/11/2010 10:04

Vallar Plc will be renamed Bumi Plc

1 Aggregate of 100% of Berau and Bumi.
2 Measured, Indicated and Inferred resources
3 Based on 100% of the annualised Berau unaudited Indonesian GAAP financials for
the year ending 30 September 2010
4 Based on 100% of the Bumi annualised unaudited Indonesian GAAP financials for
the year ending 30 June 2010
5 Voting interest limited at 29.99% with balance held in Suspended-voting
Ordinary Shares

Vallar today announced its intention to create a London-listed Indonesian
resources champion through the proposed purchase of 25% of Bumi and 75% of Berau
for a combined consideration of approximately US$3.0 billion. The Transactions
will bring together significant holdings in Indonesia's largest and fifth
largest coal producers by production and resource base and will create a
diversified international mining company built around a significant project
pipeline of base metals and other minerals

[roman2325] 16/11/2010 09:53

Only bought stakes - not the entire companies

[stuart14] 16/11/2010 09:32

Bumi has prepared and presented its consolidated financial statements included
in this announcement in accordance with Indonesian GAAP.

+----------------+-----------+-----+-----+------+----+------+------+------+------+----------+------+------+
| | Year Ended 31 December, | Six Months Ended 30 June, | |
+----------------+------------------------------------------+--------------------------------------+------+
| (US$ in | 2007 | 2008 | 2009 | 2009 | 2010 | |
| millions) | | | | | | |
+----------------+-----------+-----------+------------------+-------------+------------------------+------+
| | | (unaudited) | |
+----------------+--------------------------------------------------------+------------------------+------+
| Statement of | | | | | | |
| Income Data: | | | | | | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| Sales | 2,536.2 | 3,840.6 | 3,665.0 | 1,710.2 | 2,138.7 | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| Cost of sales | (1,780.8) | (2,218.2) | (2,549.3) | (984.4) | (1.384.2) | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| Gross | 755.4 | 1,622.4 | 1,115.7 | 725.8 | 790.5 | |
| profit | | | | | | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| Operating | (349.9) | (520.2) | (477.5) | (221.2) | (258.6) | |
| expenses | | | | | | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| Operating | 405.5 | 1,102.2 | 638.2 | 504.6 | 531.9 | |
| income | | | | | | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| Total other | 449.4 | (69.5) | (120.6) | (54.9) | (75.5) | |
| income | | | | | | |
| (expense)-net | | | | | | |
| (1) | | | | | | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| Income | 854.9 | 1,032.7 | 517.6 | 449.7 | 456.4 | |
| before income | | | | | | |
| tax benefit | | | | | | |
| (expenses)-net | | | | | | |
| (1) | | | | | | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| Income tax | (129.6) | (606.4) | (234.0) | (183.9) | (221.9) | |
| benefit | | | | | | |
| (expense) (2) | | | | | | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| Income | 725.3 | 426.3 | 283.6 | 265.8 | 234.5 | |
| before | | | | | | |
| minority | | | | | | |
| interest in | | | | | | |
| net income of | | | | | | |
| consolidated | | | | | | |
| subsidiaries | | | | | | |
| (1) | | | | | | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| Minority | (11.1) | (171.9) | (93.2) | (73.5) | (99.9) | |
| interest in | | | | | | |
| net income of | | | | | | |
| consolidated | | | | | | |
| subsidiaries | | | | | | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| Net income | 714.2 | 254.4 | 190.4 | 192.3 | 134.6 | |
| (1) | | | | | | |
+----------------+-----------+-----------+-----------+--------------------+------------------------+------+
| | | | | | | | | | |
+----------------+-----------+-----+-----+------+----+------+------+------+------+----------+------+------+



+---------------------------+-------+----+---------+----+----+----+------+----+----+-------------+
| | As at 31 December, | As at 30 June, |
+---------------------------+-------------------------------------+------------------------------+
| | 2007 | 2008 | 2009 | 2009 | 2010 |
+---------------------------+-------+-------------------+---------+------+-----------------------+
| | (US$ in millions) | (unaudited) |
+---------------------------+------------------------------------------------------+-------------+
| Balance Sheet Data: | | | | | |
+---------------------------+------------+---------+---------+----------------+------------------+
| Total current assets: | 1,117.4 | 1,627.0 | 2,044.0 | 1,662.1 | 2,596.7 |
+---------------------------+------------+---------+---------+----------------+------------------+
| Total non-current assets | 1,680.8 | 3,550.9 | 5,309.9 | 3,633.1 | 5,501.4 |
+---------------------------+------------+---------+---------+----------------+------------------+
| Total assets | 2,798.2 | 5,177.9 | 7,353.9 | 5,295.2 | 8,098.1 |
+---------------------------+------------+---------+---------+----------------+------------------+
| Total current liabilities | 1,063.5 | 2,163.0 | 2,175.4 | 2,542.4 | 2,584.3 |
| | | | | | |
+---------------------------+------------+---------+---------+----------------+------------------+
| Total non-current | 557.8 | 1,613.7 | 3,699.0 | 1,430.7 | 3,821.3 |
| liabilities | | | | | |
+---------------------------+------------+---------+---------+----------------+------------------+
| Minority interest in net | 202.3 | 352.9 | 125.7 | 156.6 | 227.9 |
| assets of consolidated | | | | | |
| subsidiaries | | | | | |
+---------------------------+------------+---------+---------+----------------+------------------+
| Total shareholders | 974.6 | 1,048.3 | 1,353.8 | 1,165.5 | 1,464.6 |
| equity | | | | | |
+---------------------------+------------+---------+---------+----------------+------------------+
| Total liabilities and | 2,798.2 | 5,177.9 | 7,353.9 | 5,295.2 | 8,098.1 |
| shareholders equity | | | | | |
+---------------------------+-------+----+---------+----+----+----+------+----+----+-------------+

[stuart14] 16/11/2010 09:28

This is where I am confused. We've bought a Co, currently valued at $5.9bn for $3bn? If so, then this could get very exciting.

Bumi

Overview

Bumi is a leading natural resources group based in Indonesia, focusing primarily
on the coal mining business. Bumi is currently listed on the Indonesia Stock
Exchange with a market capitalisation of approximately US$5.9bn as of 15
November 2010. Its subsidiaries, PT Kaltim Prima Coal ("KPC") and PT Arutmin
Indonesia ("Arutmin"), which are its primary coal companies, engage in the
surface open cut mining of high quality coal from mines in Indonesia. Bumi is
the largest thermal coal producer in Indonesia, producing approximately 24.9% of Indonesia's total coal production in 2009, and the largest coal exporter in
Indonesia. Bumi holds rights from the Indonesian Government to mine for coal in a concession area of approximately 90,960 hectares in East Kalimantan until 2021 which is operated by KPC and in another concession area of approximately 70,153 hectares in South Kalimantan until 2019 which is operated by Arutmin. Under the terms of the concessions from the Indonesian Government for KPC and Arutmin, the Government is entitled to 13.5% of coal production by KPC and Arutmin.

[stuart14] 16/11/2010 09:27

Under the terms of the Bumi Transaction, the Bakrie Group has agreed to pay
US$150 million if the Bumi Transaction fails to complete in accordance with its terms as a result of their default. Of this US$150 million, US$100 million will be paid into an escrow account with J.P.Morgan Chase.