Written on the 3 March 2015 by Antony Scholefield


BRISBANE-based metallurgical coal group Cokal (ASX: CKA) has received a $70 million unsolicited takeover bid from publicly-listed Indonesian company Cakra Mineral (INX: CKRA).

The conditional offer is priced at 15c a share, which represents a 58 per cent premium on Cokal's last trade at 9.5c. Alternatively, Cakra is offering an equivalent value of its shares to Cokal investors.

Either offer would fall below the $124 million offered for Cokal in October 2013 by Singapore's Blumont Group. That deal collapsed after Blumont shares plummeted.

Cokal chairman Peter Lynch says the company will take to time to assess the Cakra Mineral offer, as well as proposed non-exclusive underwriter Sinarmas Sekuritas.

He says various legal and structural issues will arise because two different exchanges are involved, although he conceded that Cakra had clearly "thought it through".

Cokal warns shareholders that it's uncertain whether any agreement or transaction will result. The Cakra bid is conditional on at least 90 per cent acceptance of Cokal's shares.

Cakra Mineral is pushing to enter an implementation agreement within 30 days. The company already has a minority interest of around 25 per cent in four of Cokal's Indonesian exploration properties, but Lynch says that won't dispel the need for due diligence.

"We haven't really engaged with them too much," he says.

Cakra was previously known as Citra Kebun Raya Agri, but changed its name last April as its core investments shifted from plantations to iron ore mining.

Its investments now cover various iron ore subsidiaries, including joint ventures with Hong Kong group Z&N and Chinese mining company Zhe Jian Baoli Mining.

It also owns Takaras Inti Lestari, which produces zircon sand, and Dunestone Development, a mineral commodity trading group based in the British Virgin Islands.

A takeover of Cokal would allow Cakra Mineral, which has a market capitalisation of about $71 million, to further develop its planned coal mining division.

Cokal's primary Indonesian operation is a shallow-cut coal mine called the Bumi Barito Minera Project. Lynch says it is part of the "first batch" to be processed by Indonesia's Investment Coordinating Board, and to receive scrutiny from a renewed anti-corruption focus.

The project received a major funding package from Platinum Partners in 2014.

Author: Antony Scholefield





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