RNS Number : 2437W
Vallar Plc
16 November 2010
VALLAR PLC
16 November 2010
Vallar Plc ("Vallar" or the "Company") announce...
· Exposure to the fast growing Indonesian and pan-Asian region
· Intention to seek a Premium Listing on the Official List ...
2 Measured, Indicated and Inferred resources
3 Based on 100% of the annualised Berau unaudited Indonesian GAAP financials ...
"We are delighted to have taken this important step to deliver on the strategy that we set out at the time of Vallar's IPO...
Neil Passmore
Finsbury: 020 7251 3801
Ed Simpkins
Clare Hunt
This announcement has been issued by and is the sole responsi...
The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and theref...
Creation of London-listed Indonesian coal champion
Introduction
Vallar is pleased to announce its intention to create a Lo...
The proposed Acquisition will be treated as a "reverse takeover" for the purposes of the Listing Rules. Accordingly, follo...
The proposed Acquisition is expected to complete on or around 8 April 2011.
Purchase of 75% holding in Berau
Vallar's prop...
Financial Officer and will continue to control the management, operations and policy of Bumi
7 Voting interest limited at ...
Recapital (via Mutiara) 24.9%
Existing Vallar ordinary shareholders 28.3%
Vallar management and Founders 3.8% (pre-convers...
8 Based on 100% of the annualised Berau unaudited Indonesian GAAP financials for the year ending 30 September 2010
9
Based...
Indonesia is also one of the lowest cost thermal coal producers globally, with a cash cost per tonne of US$33. It is the t...
Management expect to create shareholder value through a two-pronged strategy:
First, the Company will seek to maximise the...
Nathaniel Rothschild, Co-Chairman
Sir Julian Horn-Smith, Deputy Chairman and Senior Independent Non-Executive Director
Ros...
Mr Bakrie brings a wealth of corporate experience to Bumi Plc having helped steward numerous businesses to success in the ...
the board of directors of De La Rue Plc and Lloyds Banking Group Plc.
Rosan Roeslani - Non-Executive Director
The Vallar B...
Ari Hudaya currently serves as the President Director of Bumi Resources and has held this position since 2001. He has also...
Vallar was formed through an IPO in July 2010 to acquire to acquire a major company, business or asset that has significan...
Bumi is a leading natural resources group based in Indonesia, focusing primarily on the coal mining business. Bumi is curr...
· KPC markets and sells coal produced at the Sangatta and Bengalon mines outside Japan through a marketing affiliate of Gl...
respectively, and its net income was US$714.2 million (which included extraordinary income of US$471.6 million resulting f...
Primary Coal Mines
Bumi operates seven primary mines: the Sangatta and Bengalon mines at KPC and the Senakin, Satui, Mulia...
· the coal preparation area, consisting of a ROM coal stockpile, a coal crushing and screening plant and a coal washing pl...
of approximately 8.0 million tonnes of coal. On December 13, 2006, Mitratama became its wholly-owned subsidiary when Bumi ...
Meratus mountain range. The Mulia seam stretches approximately 40.0 kilometres from northeast to southwest, running parall...
bulldozers, graders and other heavy equipment. Following extraction, coal hauling trucks transport the coal approximately ...
Resources Ltd. ("Herald"), BRM also has an interest in the Dairi Project, which is a zinc and lead concession located in t...
Income tax benefit (expense) (
2
) (129.6) (606.4) (234.0) (183.9) (221.9)
Income before minority interest in
net income o...
Net cash provided from operating activities 158.0 776.6 246.1 174.6 72.2
Net cash provided from (used in) investing
activi...
locations, namely Kelai, Gurimbang and Punan.
Berau Coal supplies coal, both directly and through marketing agents, to cus...
energy coal from the Sambarata mine is blended with coal from the Lati or Binungan mines, depending on the quality grade
r...
Subtotal
52 90 142
Sambarata:
Block A 0 0 0
Block B East 5 3 8
Block B West 10 2 12
Block B1 20 13 33
Subtotal
35 19 54
To...
To determine whether the commencement of mining is economically viable at a particular area, Berau Coal conducts a financi...
(Rp in billions)
As at 31 December, As at 30 September,
2007 2008 2009 2009 2010
(unaudited) (unaudited)
Balance sheet dat...
conform to the March 31, 2010 consolidated financial statements presentation.
(Rp in billions)
Year ended 31 December,
Nin...
6. Conversion of Founder Shares and possible future conversion of Founder Securities
Completion of the Acquisition gives t...
This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, issue, subsc...
APPENDIX
DEFINITIONS
The following definitions apply throughout this announcement, unless the context requires otherwise:
...
"Consideration Shares" means Ordinary Shares issued as consideration
in connection with the Transactions;
"Directors" mean...
the share purchase agreements entered into in
respect of the Transactions which are designed
to keep the Bakrie Group belo...
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Vallar Plc ("Vallar" or the "Company") announces acquisition of holdings in PT Bumi Resources Tbk ("Bumi") and PT Berau Coal Energy Tbk ("Berau")

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Vallar Plc ("Vallar" or the "Company") announces acquisition of holdings in PT Bumi Resources Tbk ("Bumi") and PT Berau Coal Energy Tbk ("Berau")

  1. 1. RNS Number : 2437W Vallar Plc 16 November 2010 VALLAR PLC 16 November 2010 Vallar Plc ("Vallar" or the "Company") announces acquisition of holdings in PT Bumi Resources Tbk ("Bumi") and PT Berau Coal Energy Tbk ("Berau") Creation of London-listed Indonesian coal champion · Vallar to purchase 75% of Berau and 25% of Bumi · Consideration of approximately US$3.0 billion made up of a combination of cash and new Vallar Shares · Significant benefits identified for stakeholders in each of Bumi, Berau and Vallar through: - maximising the potential of the largest coal producing assets in Indonesia - leveraging management experience, industry relationships and access to capital - exposure to the largest and fifth largest Indonesian coal producers by production (78Mt in 2010) with a significant resource base (12bn1, 2 tonnes in aggregate) and track record of profitability (EBITDA of US$350m3 and US$1,431m4 for Berau and Bumi respectively for last twelve months) http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 1 of 41 11/20/2010 1:03 AM
  2. 2. · Exposure to the fast growing Indonesian and pan-Asian region · Intention to seek a Premium Listing on the Official List of the Financial Services Authority and trading on the Main Market of the London Stock Exchange and, subject to applicable laws, explore a potential listing on the Indonesia Stock Exchange · Collaborative partnership with two of Asia's most dynamic business families · Mandatory offer to be made to the minority shareholders of Berau and intention to increase ownership in Bumi during 2011 · The Board of Directors of Vallar will be led by Indra Bakrie and Nathaniel Rothschild and will have a strong Indonesian presence. Vallar's existing board representatives will remain (with the exception of Robert Sinclair) and the Company will have a majority of Independent Non-Executive Directors. Sir Julian Horn-Smith is to be appointed as Deputy Chairman and Senior Independent Non-Executive Director · Bakrie Group will be the largest combined shareholder in Vallar with 43.0%5 of Vallar Shares and will have the right to nominate three directors including the position of Chairman, Chief Executive Officer and the Chief Financial Officer and will continue to control the management, operations and policy of Bumi · Consistent with Vallar's stated strategy at the time of its initial public offering ("IPO") · Vallar Plc will be renamed Bumi Plc 1 Aggregate of 100% of Berau and Bumi. http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 2 of 41 11/20/2010 1:03 AM
  3. 3. 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. The potential of the proposed Acquisition represents the delivery of the Vallar strategy announced at the time of its IPO to seek to create shareholder value through establishing a business with significant operations in the global metals, mining and resources sector with the intention of increasing its scale and profitability by efficiently deploying capital to expand and enhance current operations and by recruiting and retaining experienced and specialist industry personnel for key management positions. Commenting on the proposed Acquisition: Indra Bakrie, proposed Chairman of Vallar, said: "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." Nathaniel Rothschild, proposed Co-Chairman of Vallar, said: http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 3 of 41 11/20/2010 1:03 AM
  4. 4. "We are delighted to have taken this important step to deliver on the strategy that we set out at the time of Vallar's IPO in identifying and acquiring these attractive assets. The structure that we established through the IPO has enabled us to act quickly to secure these high quality assets, which we believe will create value for our shareholders. I am also particularly pleased to be welcoming to the Board representatives of two such dynamic Asian business families and look forward to developing our strategy with them over the coming years." Ari Hudaya, proposed Group CEO of Vallar, said: "It is a very exciting time to be a mining company in Indonesia. The fundamentals of the metals and mining sector are compelling, given the strength of demand from China and India, and we are ideally located to capitalise on that growing demand. Indonesia itself also offers us many exciting growth opportunities as power consumption continues to grow in this politically stable and economically strong country." This summary should be ready in conjunction with the full announcement attached including the Appendix which includes certain defined terms used throughout this announcement. A presentation to investors and analysts will be made at 11:30am GMT today. This presentation will be broadcast live at www.vallar.com. For further information, please contact: Vallar: 01534 728 235 Nathaniel Rothschild Sir Julian Horn-Smith J.P. Morgan Cazenove: 020 7588 2828 Ian Hannam Ben Davies http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 4 of 41 11/20/2010 1:03 AM
  5. 5. Neil Passmore Finsbury: 020 7251 3801 Ed Simpkins Clare Hunt This announcement has been issued by and is the sole responsibility of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by J.P. Morgan plc (which conducts its UK investment banking activities as J.P. Morgan Cazenove) ("J.P. Morgan Cazenove") or by any of its affiliates or agents as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. J.P. Morgan Cazenove, which is authorised and regulated by the Financial Services Authority, is acting for the Company in connection with the Acquisition and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of J.P. Morgan Cazenove. Credit Suisse, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Bumi, Berau and the Bakrie Group and no one else in connection with the transaction and will not be responsible to anyone other than the aforementioned for providing the protections afforded to clients of Credit Suisse nor for providing advice in connection with the transaction or this announcement or any matter referred to herein. This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, issue, subscribe for, sell or otherwise dispose of any securities, nor any solicitation of any offer to purchase, otherwise acquire, issue, subscribe for, sell or, otherwise dispose of, any securities. This announcement is not an offer of securities for sale or a solicitation of an offer to purchaser securities. The securities of the Company referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States unless they are registered with the U.S. Securities and Exchange Commission or an exemption from the registration requirements of the Securities Act is available. http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 5 of 41 11/20/2010 1:03 AM
  6. 6. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions. This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security, therefore this announcement does not constitute a public offering in Indonesia under Law Number 8 of 1995 regarding Capital Market. Certain statements in this announcement are forward-looking statements which are based on the Company's, expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. No statement in this announcement is intended as a profit forecast and no statement in this announcement should be interpreted to mean that earnings per Ordinary Share for the current or future financial years would necessarily match or exceed the historical published earnings per Ordinary Share. VALLAR PLC 16 November 2010 Vallar Plc ("Vallar" or the "Company") announces acquisition of holdings in PT Bumi Resources Tbk ("Bumi") and PT Berau Coal Energy Tbk ("Berau") http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 6 of 41 11/20/2010 1:03 AM
  7. 7. Creation of London-listed Indonesian coal champion Introduction Vallar is pleased to announce 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 proposed Acquisition will create a diversified international mining company built around a significant coal production base in Indonesia and a project pipeline of coal, base metals and other minerals across Asia and Africa. Together, Bumi and Berau will have 2010 calendar year expected production of 78Mt6 of coal and over 12bn tonnes of resources6. The Company intends to be the first major Indonesian focused company to achieve a Premium Listing on the Official List of the Financial Services Authority and trading on the London Stock Exchange's main market for listed securities and also, subject to applicable laws, will explore a potential listing on the Indonesia Stock Exchange. The Company will be renamed Bumi Plc. Vallar believes that the proposed Acquisition will create a vehicle with exposure to the fast growing Indonesian and pan-Asian region. Indonesia is the largest economy in Southeast Asia and is the third fastest growing country in the G20, behind China and India. Coal production in Indonesia has increased nearly 40% over the last five years and both domestic and export demand is expected to grow significantly. As the world's largest exporter of thermal coal, Indonesia is ideally positioned to benefit from growing import demand from Asian economies, particularly China and India. Indonesia's proximity to these key end markets facilitates reduced transportation costs for exporters relative to those in other major coal exporting countries such as Australia and Colombia. Through Bumi's base metals subsidiary, PT Bumi Resources Minerals Tbk ("BRM"), Vallar will also have exposure to interests in copper, gold, iron ore, lead, molybdenum and zinc assets with the most significant of these being an effective 18% stake in the Batu Hijau copper/gold mine on the Indonesian island of Sumbawa. BRM is currently seeking a listing on the Indonesia Stock Exchange as part of its IPO. http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 7 of 41 11/20/2010 1:03 AM
  8. 8. The proposed Acquisition will be treated as a "reverse takeover" for the purposes of the Listing Rules. Accordingly, following the release of this announcement, the Company understands that the Ordinary Shares will be suspended from trading on the Official List and on the London Stock Exchange. The Company and its advisers intend to work closely with the FSA to provide the required information for trading in the Ordinary Shares to re-commence at the earliest possible date. The Company will provide updates to the market as appropriate. 6 Aggregate of 100% of Berau and Bumi 1. The Acquisition The proposed Acquisition will consist of: · Consideration of US$1,584 million paid by Vallar to Mutiara, a subsidiary of Recapital for 75% of Berau (at Rp.540 per Berau Share), comprising: - US$739 million cash consideration for 35% of Berau (US$639 million will be paid to Mutiara shortly after the signing of the Berau Transaction with the balance being subject to the escrow arrangement described below); and - 52.3 million new Vallar Shares, issued at a value of £10.00 per Vallar Share, in consideration for 40% of Berau · Consideration of 90.1 million new Vallar Shares, issued at a value of £10.00 per Vallar Share, for 25% of Bumi from the Bakrie Group (comprised of approximately 62.7 million new Ordinary Shares and 27.4 million new Suspended-voting Ordinary Shares). http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 8 of 41 11/20/2010 1:03 AM
  9. 9. The proposed Acquisition is expected to complete on or around 8 April 2011. Purchase of 75% holding in Berau Vallar's proposed purchase of 75% of Berau will trigger a Mandatory Cash Offer ("MCO") for the remaining issued share capital of Berau. The MCO will be made on the same terms as Vallar's acquisition at Rp.540 per Berau Share. Mutiara has undertaken not to accept the MCO in respect of those Berau Shares that it will continue to own following the closing of the Berau Transaction. The MCO will be triggered upon transfer of the registered title to the Berau Shares to Vallar by Mutiara, which is expected to take place on or around 8 April 2011 after the expiry of BCE Lock-up pursuant to which Mutiara is restricted from transferring its holding of Berau Shares until 7 April 2011. Prior to the release of the BCE Lock-up, with effect from the Initial Berau Closing (which is expected to occur on or around 18 November 2010) Vallar will hold an indirect economic and voting interest in Berau through arrangements entered into with Mutiara. Completion of the Berau Transaction will take place on, or shortly after, the expiry of the BCE Lock-up A portion of the Berau Shares proposed to be purchased will be acquired by the Vallar Subsidiary rather than Vallar itself and the Berau Shares proposed to be purchased by Vallar are expected to be transferred to the Vallar Subsidiary in due course. J.P. Morgan Cazenove acted as financial adviser to Vallar in relation to the Berau Transaction and provided a fairness opinion. Credit Suisse acted as financial adviser to Berau in relation to the transaction. Purchase of 25% holding in Bumi Due to the size of its current shareholding in Bumi and the size of the interest it will acquire in Vallar following the closing of the Bumi Transaction, the Bakrie Group has agreed that part of the consideration it receives will be in the form of Suspended-voting Ordinary Shares in order to ensure that the Bakrie's Group's aggregate holding in Vallar will not exceed 29.9%. The Suspended-voting Ordinary Shares will automatically convert into Ordinary Shares in the event of further equity issues by Vallar provided that following conversion the Bakrie Group's holding of Ordinary Shares does not exceed 29.9% of the total number of issued Ordinary Shares. Bakrie Group will be the largest combined shareholder in Vallar with 43.0%7 of Vallar Shares and will have the right to nominate three directors including the position of Chairman, Chief Executive Officer and the Chief http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 9 of 41 11/20/2010 1:03 AM
  10. 10. Financial Officer and will continue to control the management, operations and policy of Bumi 7 Voting interest limited at 29.99% with balance held in Suspended-voting Ordinary Shares The transfer by B&BR (one of the members of the Bakrie Group) of Bumi Shares to Vallar is required to be approved by shareholders of B&BR at a shareholders' meeting which is expected to convene on or around 14 January 2011. The Bakrie family have irrevocably committed to exercise or direct the exercise of a sufficient number of the voting rights attaching to B&BR shares to ensure that the required shareholders' resolution to be put to B&BR's shareholders is passed at that shareholders' meeting. Completion of the Bumi Transaction will take place on, or shortly after, the passing of the aforementioned shareholders' resolution. 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. Subject to market conditions, applicable laws and regulations, a potential exchange offer on terms to be confirmed, issuing new Ordinary Shares in return for Bumi Shares, is being considered for the outstanding Bumi Shares not acquired by Vallar pursuant to the Acquisition. J.P. Morgan Cazenove acted as financial adviser to Vallar in relation to the Bumi Transaction and provided a fairness opinion. Credit Suisse acted as financial adviser to Bumi and the Bakrie Group in relation to the transaction. The shareholding structure of the Company following the completion of the both the Transactions is expected to consist of: Bakrie Group 43.0% http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 10 of 41 11/20/2010 1:03 AM
  11. 11. Recapital (via Mutiara) 24.9% Existing Vallar ordinary shareholders 28.3% Vallar management and Founders 3.8% (pre-conversion of Founder Shares into Ordinary Shares) 2. Background to and Reasons for the Acquisition Creation of Indonesian national champion in natural resources Through the proposed Acquisition the Company will gain an exposure to Indonesia's largest and fifth largest coal producers by production. Together, Bumi and Berau are expected to produce 78Mt in calendar year 2010, rising significantly going forward with over 12bn tonnes of resources between them. EBITDA of US$350m8 and US$1,431m9 was generated by Berau and Bumi over the last twelve months respectively. Indonesia is the largest economy in Southeast Asia and the third fastest growing country in the G20, behind China and India. Coal production in Indonesia has increased nearly 40% over the last five years and both domestic and export demand is expected to grow significantly going forward. The Pacific seaborne thermal coal market has grown at over 9% CAGR in the past 23 years. As an exporter, Indonesia is ideally positioned to meet the growing demand from Asian economies, particularly China and India. Indonesia is already the largest thermal coal exporter globally and its proximity to these key end markets facilitates reduced transportation costs. Vallar is therefore ideally located to capture this growth through its high quality assets and coastal locations. The combined entity is expected, via its London listing, to have the financing capacity to pursue future growth opportunities through acquisitions of additional licenses and operations. http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 11 of 41 11/20/2010 1:03 AM
  12. 12. 8 Based on 100% of the annualised Berau unaudited Indonesian GAAP financials for the year ending 30 September 2010 9 Based on 100% of the Bumi annualised unaudited Indonesian GAAP financials for the year ending 30 June 2010 Opportunity to benefit from growing industrialisation of emerging markets The Directors believe that the long-term global macroeconomic outlook for the global metals, mining and resources sector is positive. With limited new supply of target commodities coming on-line against the background of growing demand from the industrialisation of emerging economies, the Directors believe the fundamentals of this sector are compelling. Strong demand, in particular from India and China, is expected to account for a major part of the international trade flow. Growth in Chinese consumer demand is resulting in incremental power consumption and domestic supply is likely to be constrained by recent small mine shutdowns and inadequate transportation networks. Indian coal imports could potentially reach approximately 100Mt by 2012 as the government looks to add 90GW of new generating capacity and is unable to tap into domestic supply due to inadequate infrastructure to exploit its coal reserves. Indonesia is the largest thermal coal exporter globally and is ideally located to service both of these markets, with a significantly shorter average freight distance than Australian or other non-Asian producers. For example, the freight cost differential between Indonesian and Australian producers is approximately US$5.00 per tonne. Attractive domestic growth opportunities, with low cost production advantage Demand for Indonesian coal is being driven both by its Asian neighbours and the domestic market. Coal production in Indonesia has grown from 152Mt in 2005 to 208Mt in 2009. The Indonesian economy is strong and growing at the third fastest rate in the G20 behind China and India. It currently has a population of 222m people, which is expected to grow by nearly 15% over the next decade. In order to ensure sufficient electricity for this growing population, the Indonesian government has announced a 20,000MW capacity power programme to include the development of hydroelectric, gas combined-cycle, geothermal and coal fired power plants. Power generation growth is forecast to increase above GDP growth over the next five years. http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 12 of 41 11/20/2010 1:03 AM
  13. 13. Indonesia is also one of the lowest cost thermal coal producers globally, with a cash cost per tonne of US$33. It is the third lowest cost producer behind South Africa and China, which puts it in a strong position through the cycle and gives it a clear competitive advantage over other international producers. Delivery on strategy set out at time of Vallar IPO The potential of the proposed Acquisition represents the delivery of the Vallar strategy announced at the time of its IPO to seek to create shareholder value through establishing a business with significant operations in the global metals, mining and resources sector with the intention of increasing its scale and profitability by efficiently deploying capital to expand and enhance current operations and by recruiting and retaining experienced and specialist industry personnel for key management positions. The Founders established a flexible structure that would facilitate an acquisition through Vallar's ability to transact quickly and access the available funds from existing resources or through an issue of new shares. The Group's structure has enabled it to secure these high quality assets, which the Company believes will create value for Vallar's shareholders. The Company intends to seek a Premium Listing on the Official List of the Financial Services Authority and trading on the London Stock Exchange's main market for listed securities which will give it increased liquidity and visibility for any future equity raising, debt refinancing or other capital markets transaction. The Company will also, subject to applicable laws, seek a potential listing on the Indonesia Stock Exchange. It is the intention to combine the existing strong management teams of Bumi and Berau with key individuals from Vallar to provide local expertise with detailed knowledge of the operating assets and international strategic experience. The proposed Acquisition also provides the opportunity for Vallar to partner with two of the most dynamic Asian business families. Strategy for Vallar http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 13 of 41 11/20/2010 1:03 AM
  14. 14. Management expect to create shareholder value through a two-pronged strategy: First, the Company will seek to maximise the potential of the largest portfolio of coal producing assets in Indonesia. In order to do this, management intends to deliver the strong organic growth profile from current operations and projects. In addition, efforts to create near-term shareholder value will focus on identified efficiency gains, the potential to share marketing services and procurement and the possible refinancing of existing borrowings. In the medium-term, portfolio optimisation should yield additional benefits. Second, Vallar intends to leverage its combined management experience, industry relationships and access to capital in order to capture exciting regional growth opportunities from China, India, Asia and beyond. The Company's ability to execute on this strategy will be supported by partnership with two of the most dynamic Asian business families and will be facilitated by the acquisition currency of a London listing enabling consolidation. 3. Board of Directors and Senior Management The Board of Directors welcomes several new members who provide a powerful combination of local expertise and industry knowledge and strategic relationships. These individuals will further enhance the already strong Board of Directors in an effort to maximise shareholder value. Indra Bakrie will be appointed Chairman and Rosan Roeslani will be appointed a non Independent Non-Executive Director from 18 November 2010. Sir Julian Horn-Smith will be appointed as Deputy Chairman and Senior Independent Non-Executive Director. In addition, Ari Hudaya and Andrew Beckham will be appointed to the Board as soon as reasonably practicable after the Nomination Committee of the Board has identified appropriate candidates to join the Board in order to maintain a majority of Independent Non-Executive Directors on the Board. Following the completion of the proposed Acquisition, it is anticipated that the persons named below will sit on the Board of Directors: Indra Bakrie, Chairman http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 14 of 41 11/20/2010 1:03 AM
  15. 15. Nathaniel Rothschild, Co-Chairman Sir Julian Horn-Smith, Deputy Chairman and Senior Independent Non-Executive Director Rosan Roeslani, Non-Executive Director Ari Hudaya, Executive Director, Chief Executive Andrew Beckham, Executive Director, Finance Director James Campbell, Executive Director, Business Development and Strategy Sir Graham Hearne CBE, Independent Non-Executive Director Lord Renwick, Independent Non-Executive Director Steven Shapiro, Independent Non-Executive Director In addition to the above, four new Independent Non-Executive Directors will also be appointed to the Board. Senior Board of Directors Indra Bakrie - Chairman http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 15 of 41 11/20/2010 1:03 AM
  16. 16. Mr Bakrie brings a wealth of corporate experience to Bumi Plc having helped steward numerous businesses to success in the past including Bumi. The Vallar Board of Directors believe Mr Bakrie's appointment will retain the local Indonesian identity of the combined Company and provide strategic guidance in the transitioning of the separate businesses to a single London listed major coal producer. Nathaniel Rothschild - Co-Chairman Mr Rothschild is a founder of Vallar and has been instrumental in the conceptualisation and delivery of the Acquisition. His continued role as Co-Chairman is supported by the existing Board of Directors of Berau and Bumi and his extensive experience in the mining sector will be a valuable contribution to Bumi Plc. Mr Rothschild previously served as Co-Chairman of Atticus Capital LP, and currently serves as Chairman of the international advisory board of UC Rusal Plc, as a member of the board of Barrick Gold Corporation and Chairman of EN+. An Office of the Chairmen will be established to advise Mr. Bakrie and Mr. Rothschild on maximising shareholder value at the new company. Daren Morris will assume the role of Executive Vice President and Global Head of M&A in the Office of the Chairmen which will initially be based in London. Sir Julian Horn-Smith - Deputy Chairman and Senior Independent Non-Executive Director ("SINED") Sir Julian Horn-Smith's appointment as Deputy Chairman and SINED demonstrates the Company's intention to adhere to the highest UK corporate governance standards. His appointment will provide strong leadership and appropriate shareholder representation on the Bumi Plc Board of Directors. Sir Julian Horn-Smith has spent more than 25 years in the telecommunications sector, after joining Vodafone Group at its foundation. He held a number of senior and general management posts with Vodafone from 1984 to 2006, including as Group Chief Operating Officer from 2001 and then as deputy CEO from 2005. Sir Julian currently acts as a senior advisor to UBS Investment Bank and CVC Capital Partners, and is a member of http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 16 of 41 11/20/2010 1:03 AM
  17. 17. the board of directors of De La Rue Plc and Lloyds Banking Group Plc. Rosan Roeslani - Non-Executive Director The Vallar Board of Directors welcomes Mr Roeslani as Deputy Chairman to Bumi Plc and a leading representative of Berau. He is expected to make an invaluable contribution through his experience of local operations, strategic experience and enthusiasm. Mr. Roeslani was appointed to the board of directors of Berau Coal Energy in July 2010. He was an independent commissioner of PT Kaltim Prima Coal and PT Arutmin Indonesia, both of which are subsidiaries of PT Bumi Resources Tbk. Mr. Roeslani is also the president commissioner of PT Dwimitra Brawisa Sejahtera, PT Restyle Concept and PT Lupita Amanda, a commissioner at PT Kemang Jaya Raya, PT Redal Semesta and PT Selaras Indah Sejati, and a director at PT Alberta Capital. Mr. Roeslani is a founder and the current chairman of Recapital. Executive Directors The appointment of Ari Hudaya as Chief Executive Officer and Andrew Beckham as Finance Director will provide Bumi Plc with a combination of sector experience and extensive knowledge of the Bumi and Berau operations. Ari Hudaya - Chief Executive http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 17 of 41 11/20/2010 1:03 AM
  18. 18. Ari Hudaya currently serves as the President Director of Bumi Resources and has held this position since 2001. He has also held the positions of President Commissioner of each of Arutmin, KPC, Indocoal Kalsel and Indocoal Kaltim since 2007. He currently holds the position of President Director of Enercorp and is a Director of each of IndoCoal Resources, Kalimantan Coal and Sangatta Holdings. Andrew Beckham - Finance Director Andrew Beckham was appointed a Director of Bumi Resources in June 2010. He is also the Chief Financial Officer of Bumi Resources and has held this position since December 2006. Mr. Beckham joined Bumi Resources in December 2001 having worked for Allianz, Exxon Mobil and BHP Billiton previously. James Campbell - Business Development and Strategy Director James Campbell will remain a member of the Executive Board, assuming the role of Business Development and Strategy Director. Non-Executive Directors The Board of Directors remain committed to the principals of the Combined Code and as such the objective of having a majority of the Board consisting of Independent Directors. Vallar considers itself to adhere to the highest Corporate Governance standards and as such the current Vallar Independent Non-Executive Directors including Steven Shapiro, Sir Graham Hearne and Lord Robin Renwick, will continue in their roles. Further appointments to the Board will be considered in the future in-line with the highest corporate governance standards. 4. Information on Vallar http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 18 of 41 11/20/2010 1:03 AM
  19. 19. Vallar was formed through an IPO in July 2010 to acquire to acquire a major company, business or asset that has significant operations in the global metals, mining and resources sector. Vallar PLC is admitted to the Official List and is listed on the London Stock Exchange's main market for listed securities (ticker: VAA.L), and as at the end of August 2010, has over US$1.0 billion in cash resources. Vallar set out the following strategy at the time of its IPO. "In recent years, significant consolidation in the sector has created a number of large complex conglomerates, which contain non-core operations that are not operating to their full potential. In addition, the global recession together with a reduction in finance available on acceptable terms, has meant a more conservative approach to financial leverage and an increased focus on portfolio optimisation. Our team, with its significant experience and knowledge of the sector, intends to identify such situations, structure an acquisition and realise previously unrecognised value. Increasing global urbanisation and industrialisation, is, in our view, likely to lead to increased demand for commodities worldwide. At the same time, we believe that the supply of high-quality commodities may become more constricted; the recession has resulted in delays to capital investment, and resources companies are having to turn to more complex topographies and geographies to develop new sources of production. We see a number of mid-sized independent producers and emerging market-based owners which are looking to secure finance, and we believe that there are opportunities to acquire controlling interests in partnership with existing owners and management, and bring much needed additional investment, management and financial expertise to maximise the potential value." 5. Information on Bumi and Berau Bumi Overview http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 19 of 41 11/20/2010 1:03 AM
  20. 20. 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. KPC and Arutmin have seven primary mines in commercial operation -the Sangatta and Bengalon mines operated by KPC and the Senakin, Satui, Mulia, Asam Asam and Batulicin mines operated by Arutmin. As of September 2008, Bumi had 2.9 billion tonnes of reserves with reserves and resources totalling 10.7 billion tonnes. In the years ended 31 December 2007, 2008 and 2009, KPC and Arutmin produced 54.2 million, 52.1 million and 57.5 million tonnes of coal at their mines. In the six months ended June 2010, KPC and Arutmin produced 31.0 million tonnes of coal, compared to 25.1 million tonnes in the six months ended June 2009. Under its current mine plans, Bumi intends to expand its annual coal production capacity at KPC and Arutmin to approximately 61 million tonnes in 2010 and approximately 70.0 million tonnes in 2011. A substantial portion of the coal produced at the Sangatta mine is mined through two mining contractors, PT Thiess Contractors Indonesia and PT Pamapersada Nusantara, with the remainder mined through Bumi's own operations. Bumi produces coal at the Bengalon site through a mining contractor, PT Darma Henwa, which is an associated company of the Group. Bumi produces substantially all of the coal at the Senakin, Satui, Mulia, Asam Asam and Batulicin mines through three mining contractors, Darma Henwa, Thiess, and PT Cipta Kridatama, with the remainder mined through arrangements with smaller local mining contractors. KPC's and Arutmin's mines are located in close proximity to their coal shipping facilities on the Kalimantan coast. KPC and Arutmin export a substantial portion of the coal they produce to end-user power plants, steel plants and other industrial end users, primarily in China, Japan, Taiwan, India, Europe and South Korea. KPC and Arutmin market and sell all of their coal to third party customers through marketing agents. http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 20 of 41 11/20/2010 1:03 AM
  21. 21. · KPC markets and sells coal produced at the Sangatta and Bengalon mines outside Japan through a marketing affiliate of Glencore International AG and within Japan through Mitsubishi Corporation · Arutmin markets and sells coal produced at the Senakin, Satui, Mulia, Asam Asam and Batulicin mines outside Indonesia through a marketing affiliate of BHP Billiton Plc and in Indonesia through Enercorp Limited ("Enercorp") KPC and Arutmin exported approximately 92.2%, 90.0%, 90.3%, 89.8% and 90.3% of their coal sales volumes during the years ended 31 December 2007, 2008 and 2009, the six months ended 30 June 2009 and six months ended 30 June 2010, respectively. Sales are priced and invoiced in US dollars or Indonesian Rupiah, but are generally based on U.S. dollar-denominated prices. KPC and Arutmin sold approximately 81.2%, 80.2%, 79.2%, 71.1% and 80.6% of their coal sales volumes during the years ended 31 December 2007, 2008, 2009, the six months ended 30 June 2009 and the six months ended 30 June 2010, respectively, under coal supply agreements with terms of one year or longer, and the balance through spot market sales. Major electricity generating companies and industrial users of coal, which include cement and steel mills, in Asia comprise the principal customers for Bumi's coal. Bumi has contracts with large electricity generating companies and industrial users located primarily in Taiwan, Japan, Hong Kong, Malaysia, Italy and the United States. In June 2007, Bumi Resources divested 30.0% of its shares in each of Indocoal Resources (Cayman) Limited, KPC, Arutmin, PT Indocoal Kaltim Resources and PT Indocoal Kalsel Resources (together, the "IndoCoal Group Companies") to Bhivpuri Investments Limited ("Bhivpuri") and Bhira Investments Limited ("Bhira"), each a subsidiary of The Tata Power Company Limited of India. In connection with the Divestment, Bumi Resources, the IndoCoal Group Companies and Tata entered into a shareholders' agreement that governs the operations of the IndoCoal Group Companies and Bumi Resources' and Tata's rights as shareholders in the IndoCoal Group Companies In addition to coal mining, Bumi owns, through 100% ownership of BRM, interests in various non-coal minerals mining businesses. (See below description of BRM) For the years ended December 31, 2007, 2008 and 2009, Bumi's total sales were US$2,536.2 million, US$3,840.6 million and US$3,665.0 million, http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 21 of 41 11/20/2010 1:03 AM
  22. 22. respectively, and its net income was US$714.2 million (which included extraordinary income of US$471.6 million resulting from the Tata divestment), US$254.4 million and US$190.4 million, respectively. Reserves and Resources (million tonnes) Coal Reserves Coal Resources Total KPC: Sangatta 160 3,447 3,607 Melawan 337 - 337 North Pinang 920 - 920 Bengalon 146 977 1,123 Subtotal 1,562 4,424 5,987 Arutmin: Senakin 43 411 454 Satui 84 269 353 Batulicin 25 216 241 Sub Bituminous 407 2,047 2,454 Subtotal 557 2,943 3,502 FBS (JORC Certification in process) 98 - 98 PEB 687 415 1,102 Total 2,904 7,782 10,689 Note: Data accurate as of September 2008 Coal reserves stated are proven and probable. Coal resources stated are measured, indicated and inferred and are exclusive of reserves http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 22 of 41 11/20/2010 1:03 AM
  23. 23. Primary Coal Mines Bumi operates seven primary mines: the Sangatta and Bengalon mines at KPC and the Senakin, Satui, Mulia, Asam Asam and Batulicin mines at Arutmin. Sangatta Mine The Sangatta mine is located near the town of Sangatta, Kalimantan. The Sangatta mine has two distinct coal deposits: the Sangatta deposit and the Melawan deposit, and eight mining pits in operation. The Sangatta deposit produces bituminous coal, and the Melawan deposit produces sub-bituminous coal. Bumi management believes that the Sangatta mine is one of the largest excavator and truck open cut surface mines in the world. As measured by tonnes of overburden removed and coal mined at a single site, they believe that the Sangatta mine is the single largest thermal coal operation in Indonesia and one of the single largest thermal coal operations in the world. The coal deposits located at the Sangatta mine occur in the Balikpapan formation within the Kutai Basin of East Kalimantan. The deposits are located approximately 20.0 kilometres from the East Kalimantan coast in low rainforest and were formed under geological conditions resulting in largely uncontaminated organic deposits that were converted into thick, clean coal seams containing unusually low levels of ash. KPC commenced operations at the Sangatta mine in January 1992. KPC extracts the coal from mining pits using excavators, bulldozers, graders and other heavy equipment. Coal hauling trucks then transport the coal to the coal crushing plant owned by Mitratama which is located at the Sangatta mine, marking the beginning of the coal chain for the Sangatta mine for the movement of the coal from the coal preparation and processing area to the coal shipping terminal for the Sangatta mine on the East Kalimantan coast. The coal chain at the Sangatta mine has three distinct stages: http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 23 of 41 11/20/2010 1:03 AM
  24. 24. · the coal preparation area, consisting of a ROM coal stockpile, a coal crushing and screening plant and a coal washing plant; · a 13.2-kilometer overland belt conveyor to transport the coal from the coal preparation plants to the coal shipping terminal; and · a coal shipping terminal, consisting of a stacker, a stacker-reclaimer, a shiploader and port stockpile facilities. For the years ended 31 December 2007, 2008, 2009 and for the six months ended 30 June 2009 and 30 June 2010, KPC's coal production at Sangatta mine was 30.6 million tonnes, 31.5 million tonnes, 33.4 million tonnes, 14.8 million tonnes and 17.1 million tonnes, respectively. Bengalon Mine In 1986, KPC identified approximately 60 coal seams at the Bengalon site at a location approximately 35.0 kilometres north of the Sangatta mine. KPC began further exploration of the Bengalon site in 1991. As of June 30, 2008, each of the proved and probable recoverable reserves and proved and probable marketable reserves within the Bengalon mine totalled an estimated 146 million tonnes (of which 145 million tonnes were proved and 1 million tonne was probable). Although KPC undertook a mine feasibility study of the Bengalon site in 1996, the former owners of KPC decided to defer Bengalon's development due to reduced demand for coal from Indonesian power producers after the onset of the Asian financial crisis in 1997. In early 2004, after Bumi Resources' acquisition of KPC, Bumi undertook new feasibility studies to confirm the Bengalon site's suitability for open pit, truck-and-shovel mining. KPC's Bengalon mine development project involved commencement of mining operations, the development of a coal haulage road from the mining pit to a barge port and construction and operation of a barge port on the Kalimantan coast. The first phase began in May 2004 with the appointment of Darma Henwa to develop the Bengalon mine and to construct a coal haulage road. After beginning operations in late 2004, Darma Henwa temporarily suspended operations in late 2004 when its then Australian parent company announced financial and operational difficulties and was placed into receivership by its creditors. After being acquired by new shareholders from its previous Australian parent company in May 2005, Darma Henwa resumed mining operations at the Bengalon mine. The second phase of the Bengalon expansion project involved the construction of a barge port facility on the Kalimantan coast approximately 20.0 kilometres from the Bengalon mine. In December 2004, KPC appointed Mitratama as its contractor to build the barge loading facility and appointed PT Inacia Perkasa Abadi to operate the port facility and barges for loading coal onto customers' ships. In late 2005, construction of the coal processing and barging facility was completed. The coal processing and barging facility at the Bengalon mine has an annual handling capacity http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 24 of 41 11/20/2010 1:03 AM
  25. 25. of approximately 8.0 million tonnes of coal. On December 13, 2006, Mitratama became its wholly-owned subsidiary when Bumi Resources exercised a purchase option held by it to acquire all of the shares of Mitratama. For the years ended 31 December 2007, 2008, 2009 and the six months ended 30 June 2009 and 30 June 2010, KPC's coal production at the Bengalon mine was 5.7 million tonnes, 6.0 million tonnes, 4.8 million tonnes, 2.2 million tonnes and 2.4 million tonnes, respectively. Senakin Mine Arutmin commenced production at the Senakin mine in 1989. The Senakin mine lies in the Tanjung Formation and the coal seam follows an anticline stretching approximately 40.0 kilometres from north to south, mining parallel to the southeast coast of Kalimantan approximately 14.0 kilometres inland. The Senakin mine comprises four distinct coal deposits: the Sangsang and Sepapah deposits on the west side of the anticline, and the North Senakin and the East Senakin deposits on the east side. Arutmin has completed mining at the Sepapah, Sangsang and North Senakin deposits, and is currently operating two mining pits at the East Senakin deposit. The Senakin mine produces a bituminous coal with high calorific value. For the years ended 31 December 2007, 2008, 2009 and the six months ended 30 June 2009 and 30 June 2010, Arutmin's coal production at the Senakin mine was 3.9 million tonnes, 3.7 million tonnes, 4.4 million tonnes, 3.0 million tonnes and 2.4 million tonnes, respectively. Satui Mine Arutmin commenced production at the Satui mine in 1991. The Satui mine lies south and west of the Senakin mine within the Tanjung Formation on the southeastern slopes of the Meratus mountain range. The Satui seam stretches approximately 40.0 kilometres from northeast to southwest, running parallel to the southeastern coast of Kalimantan, approximately 20.0 kilometres inland. The Satui mine comprises three deposits: the Karuh, Satui-Kintap and Bukitbaru deposits. For the years ended 31 December 2007, 2008, 2009 and the six months ended 30 June 2009 and 30 June 2010, Arutmin's coal production at the Satui mine was 5.4 million tonnes, 3.9 million tonnes, 5.0 million tonnes, 2.2 million tonnes and 3.0 million tonnes, respectively. Mulia Mine Arutmin commenced production at the Mulia mine in 1999. Bumi markets the cleaner burning sub-bituminous coal produced at the Mulia mine under the brand name "Ecocoal." The Mulia mine runs parallel to the Satui mine within the Tanjung Formation on the southeastern slopes of the http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 25 of 41 11/20/2010 1:03 AM
  26. 26. Meratus mountain range. The Mulia seam stretches approximately 40.0 kilometres from northeast to southwest, running parallel to the southeastern Kalimantan coast, approximately 15.0 kilometres inland. The Mulia mine comprises two deposits: the Mulia and Jumbang deposits. The Mulia mine shares the same coal chain and the Muara Satui barge port with the operations at the Asam Asam and Satui mines. Coal from the Mulia mine is crushed at facilities adjacent to the Muara Satui barge port, but, due to its specifications and low ash content does not require washing before loading. For the years ended 31 December 2007, 2008, 2009 and the six months ended 30 June 2009 and 30 June 2010, Arutmin's coal production at the Mulia mine was 2.5 million tonnes, 3.8 million tonnes, 3.8 million tonnes, 1.5 million tonnes and 2.2 million tonnes, respectively. Asam Asam Mine Arutmin commenced production at the Asam Asam mine in 2004. Bumi markets the cleaner burning sub-bituminous coal produced at the Asam Asam mine under the brand name "Ecocoal." The Asam Asam mine runs parallel to the Satui mine within the Tanjung Formation on the southeastern slopes of the Meratus mountain range. The Asam Asam seam stretches approximately 47.0 kilometres from southwest to northeast, running parallel to the southeastern Kalimantan coast, approximately 10.0 kilometres inland. The Asam Asam mine has one coal deposit. The Asam Asam mine shares the same coal chain and the Muara Satui barge port with the operations at the Mulia and Satui mines. Coal from the Asam Asam mine is crushed at facilities adjacent to the Muara Satui barge port, but, due to its specifications and low ash content does not require washing before loading. For the years ended 31 December 2007, 2008, 2009 and the six months ended 30 June 2009 and 30 June 2010, Arutmin's coal production at the Asam Asam mine was 1.7 million tonnes, 2.1 million tonnes, 7.3 million tonnes, 1.7 million tonnes and 2.7 million tonnes, respectively. Batulicin Mine Bumi commenced production at the Batulicin mine in 2003. The Batulicin mine lies between the Senakin mine and the Satui Mulia and Asam Asam mines within the Tanjung Formation, approximately 10.0 to 55.0 kilometres inland from the Kalimantan coast. The Batulicin mine comprises five deposits: the Ata, Mereh, Mangkalapi, Saring and Sarongga deposits. Coal produced at the Batulicin mine is transported by truck from the operating pits to the Batulicin barge port for shipment to the North Pulau Laut Coal Terminal. The Batulicin mine produces bituminous coal. Like Senakin and Satui coals, Batulicin coal is separated and stockpiled according to quality and then blended prior to barge loading. For the years ended 31 December 2007, 2008, 2009 and the six months ended 30 June 2009 and 30 June 2010, Arutmin's coal production at the Batulicin mine was 2.1 million tonnes, 1.9 million tonnes, 2.5 million tonnes, 1.4 million tonnes and 1.5 million tonnes, respectively. At the Senakin, Satui, Mulia, Asam Asam and Batulicin mines, all contractors at Arutmin extract coal from mining pits using excavators, http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 26 of 41 11/20/2010 1:03 AM
  27. 27. bulldozers, graders and other heavy equipment. Following extraction, coal hauling trucks transport the coal approximately 25.0 to 55.0 kilometres to the mine's coal crushing plant, which marks the beginning of the coal chain for the movement of the coal from the coal preparation and processing areas for these mines to the coal shipping terminal for those mines, the North Pulau Laut Coal Terminal, on Pulau Laut island off the South Kalimantan coast. Bumi operates four coal chains for those mines: two for the Senakin mine, one shared by the Satui, Mulia and Asam Asam mines and one for the Batulicin mine. Each coal chain has three distinct stages: · a coal preparation area with a coal crushing and screening plant and a coal washing plant, which are located near each mine's barge ports to enhance the efficiency of the coal preparation process; · a system of custom-built, self-discharging barges to transport the coal from the coal preparation plants along the South Kalimantan coast to the North Pulau Laut Coal Terminal; an · the North Pulau Laut Coal Terminal, consisting of a stacker, a stacker-reclaimer, a shiploader and port facilities. The North Pulau Laut Coal Terminal, commissioned in early 1994, is an open seaport designed to process approximately 12.0 million tonnes of coal per year. The terminal can accommodate cape size vessels of up to 140,000 dead weight tonnes in size and approximately 170 ships (each with average dead weight tonne capacity of 70,000) and 1,600 barges (each with average dead weight tonne capacity of 75,000) per year. Coal from the Senakin, Satui, Mulia, Asam Asam and Batulicin mines is barged to the coal terminal and either loaded directly onto outbound ships or stored at the stockpile yard. Operation of Bumi's own coal terminal for these mines has provided us with continuous access to a terminal facility for exporting coal. To supplement its dedicated port facilities, Bumi has access to coal shipping terminals located at Pulau Laut Island to load our coal offshore or to ship it directly to its customers using barges. At the Senakin, Satui, Mulia, Asam Asam and Batulicin mines, its ability to produce, process and transport coal is limited by the capacity of the four coal chains. The combined handling capacity of the coal crushing plants for our coal chains at these mines currently limit. BRM In addition to coal mining, Bumi has through its subsidiary, BRM, interests in various non-coal minerals mining businesses. BRM owns an effective interest of 18.0% in PT Newmont Nusa Tenggara ("NNT"), which operates the Batu Hijau copper and gold mine located in Sumbawa, Indonesia. BRM also owns interests in two gold, silver and copper mining concessions in Sulawesi, Indonesia, through its subsidiaries, PT Gorontalo Minerals ("Gorontalo Minerals") and PT Citra Palu Minerals ("Citra Palu Minerals"). BRM has a 60.0%-owned joint venture through Bumi Holdings SAS ("Bumi Mauritania") to study the feasibility of developing an iron ore mine in northwestern Mauritania, Africa and has a cooperation agreement with Trinity Business Corporation, a Liberian company, for the exploration for minerals in Liberia, Africa. Through BRM's subsidiary, Herald http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 27 of 41 11/20/2010 1:03 AM
  28. 28. Resources Ltd. ("Herald"), BRM also has an interest in the Dairi Project, which is a zinc and lead concession located in the Dairi Regency of the Province of North Sumatra in Indonesia held by Herald's subsidiary, PT Dairi Prima ("Dairi Prima"). Bumi Selected Consolidated Financial Data Bumi's selected consolidated financial data as of, and for the years ended, December 31, 2007 and 2008 presented below have been extracted or derived from Bumi's restated consolidated financial statements for such years. The summary consolidated financial data as of, and for the year ended, December 31, 2009 and as of, and for the six-month period ended, June 30, 2009 presented below has been extracted or derived from Bumi's audited restated consolidated financial statements for such periods, which have been audited by KAP Tjiendradjaja & Handoko Tomo, independent public accountants. Bumi's summary consolidated financial data as of, and for the six-month period ended, June 30, 2010 presented below has been extracted or derived from the unaudited interim consolidated financial statements for such period. 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 millions) 2007 2008 2009 2009 2010 (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 profit 755.4 1,622.4 1,115.7 725.8 790.5 Operating expenses (349.9) (520.2) (477.5) (221.2) (258.6) Operating income 405.5 1,102.2 638.2 504.6 531.9 Total other income (expense)-net ( 1 ) 449.4 (69.5) (120.6) (54.9) (75.5) Income before income tax benefit (expenses)-net ( 1 ) 854.9 1,032.7 517.6 449.7 456.4 http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 28 of 41 11/20/2010 1:03 AM
  29. 29. Income tax benefit (expense) ( 2 ) (129.6) (606.4) (234.0) (183.9) (221.9) Income before minority interest in net income of consolidated subsidiaries ( 1 ) 725.3 426.3 283.6 265.8 234.5 Minority interest in net income of consolidated subsidiaries (11.1) (171.9) (93.2) (73.5) (99.9) Net income ( 1 ) 714.2 254.4 190.4 192.3 134.6 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 liabilities 557.8 1,613.7 3,699.0 1,430.7 3,821.3 Minority interest in net assets of consolidated subsidiaries 202.3 352.9 125.7 156.6 227.9 Total shareholders’ equity 974.6 1,048.3 1,353.8 1,165.5 1,464.6 Total liabilities and shareholders’ equity 2,798.2 5,177.9 7,353.9 5,295.2 8,098.1 Year Ended 31 December, Six Months Ended 30 June, 2007 2008 2009 2009 2010 (US$ in millions) (unaudited) Statement of Cash Flow Data:( 3 ) http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 29 of 41 11/20/2010 1:03 AM
  30. 30. Net cash provided from operating activities 158.0 776.6 246.1 174.6 72.2 Net cash provided from (used in) investing activities 726.0 (1,688.5) (1,597.0) (238.5) (615.2) Net cash provided from (used in) financing activities (791.5) 940.1 1,239.1 (10.3) 549.7 Net increase (decrease) in cash and cash equivalents 92.5 28.2 (111.8) (74.2) 6.7 Cash and cash equivalents (period end) 143.7 171.9 60.1 97.7 66.8 (1) Total other income (expenses)-net for 2007 includes US$471.6 million of extraordinary income resulting from the gain on sale of 30% of the shares of the IndoCoal Group Companies to Tata through the Divestment, which was completed on June 26, 2007. Excluding this extraordinary income, total other income (expenses)-net for 2007 would have been a net expense of US$23.0 million and income before income tax expenses, net income before minority interest in net income of subsidiaries and net income for 2007 would have been US$383.3 million, US$253.7 million and US$242.6 million, respectively. (2) Income tax benefit (expense) for 2007 and 2008 reflect additional expenses of US$115.0 million and US$399.2 million in restated financial statements for 2007 and 2008, respectively, with respect to additional corporate income taxes paid by each of KPC and Arutmin for those years, based on amended annual corporate income tax returns filed by KPC and Arutmin. On December 21, 2009, the long-term supply agreements between each of KPC and Arutmin, on one hand, and IndoCoal Resources, on the other hand, were amended to modify, with effect from January 1, 2009, the coal purchase price between each of KPC and Arutmin and IndoCoal Resources, from the fixed forward price stated in the relevant long-term supply agreement to the applicable market price for each coal shipment. Audited financial statements for the six months ended 30 June 2009 (as restated) reflects an additional income tax expense of US$96.8 million. Berau Overview Berau Coal Energy is a holding company that indirectly owns 90% of PT Berau Coal ("Berau Coal"), the fifth largest coal producer in Indonesia in terms of production volume in 2009, according to the Annual Coal Production Report dated December 2009 by Indonesia's Ministry of Energy and Mineral Resources. Berau Coal engages in open-cut mining of coal in its concession area in East Kalimantan, Indonesia, where it holds coal mining rights until April 26, 2025. Berau Coal operates three mining areas in Lati, Binungan and Sambarata, where reserves were estimated to be 346 million tons as of December 31, 2009, of which 146 million tons are of the proved category and 200 million tons are of the probable category, according to Minarco-MineConsult ("MMC"). Berau Coal's concession area of approximately 118,400 hectares also contains three other reserve http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 30 of 41 11/20/2010 1:03 AM
  31. 31. locations, namely Kelai, Gurimbang and Punan. Berau Coal supplies coal, both directly and through marketing agents, to customers in Indonesia and elsewhere in Asia. Its customers are mainly utility companies and coal trading companies that purchase coal from it for resale. In recent years, Berau Coal has derived approximately 40% of its total sales revenues from domestic sales and approximately 60% of its total sales revenues from international sales. Berau Coal exports to customers in China, Hong Kong, India, Japan, South Korea, Taiwan and Thailand. Berau Coal produces thermal coal at its three mining locations and blends them in order to adjust the overall quality grade of the coal. It markets the coal under four brand names-"Mahoni," "Mahoni-B," "Agathis" and "Sungkai," with calorific values ranging from 5,000 kcal/kg to 5,600 kcal/kg (on a "gross as received" basis) and appropriate levels of ash and sulfur for use in coal-fired power plants in Indonesia and many other Asian countries. In 2007, 2008, 2009 and the three months ended March 31, 2010, Berau Coal produced 11.8 million tons, 13.1 million tons, 14.3 million tons and 3.7 million tons of coal, respectively. As of July 1, 2010, Berau Coal had contracts with aggregate commitments to purchase coal totalling 17.0 million tons in 2010, all of which was at an agreed price. Berau Coal began producing coal commercially from the Lati and Binungan mines in 1995 and the Sambarata mine in 2001. Lati is the largest of its three active mining areas and accounted for 56.8% of its production in 2009. Sambarata has the highest quality coal of all three mining areas in terms of calorific value. The three mining areas are similar in their operations but are independent, with their own separate coal terminals and barge lines. Berau Coal expects to commence commercial coal production in Gurimbang in 2012 and Kelai in 2013. Berau Coal subcontracts all of its mining, barging and drilling and blasting operations, which allows it to minimize capital expenditures and working capital requirements and focus on exploration, mine planning, supervision and sales and marketing. Berau Coal works closely with its two mining contractors, PT Bukit Makmur Mandiri Utama ("BUMA") and PT Saptaindra Sejati ("SIS"), each of which undertakes land clearing, overburden removal, coal excavation, hauling activities and road maintenance. However, pursuant to Indonesia's new mineral and coal mining law and one of its implementing regulations, by September 29, 2012, Berau Coal will need to amend its existing contracts with its mining contractors and conduct its own coal mining and processing activities, as mining services companies will only be allowed to perform overburden removal and transportation of coal in the mining process. Berau Coal uses multiple contractors for each of its other operations, such as barging, coal quality analysis and transshipping. Once the coal is mined, crushed and stockpiled, contractors barge the loads to a transhipment area at Muara Pantai in the Sulawesi sea located approximately 50 kilometres to 100 kilometres from the ports at Lati, Suaran and Sambarata. At Muara Pantai, higher http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 31 of 41 11/20/2010 1:03 AM
  32. 32. energy coal from the Sambarata mine is blended with coal from the Lati or Binungan mines, depending on the quality grade requirements of the shipment. In 2007, 2008, 2009 and the nine months ended September 30, 2010, Berau Coal had sales of Rp. 3,445.0 billion, Rp. 6,110.2 billion, Rp. 8,318.6 billion and Rp. 6,966.7 billion, respectively, and net income of Rp. 25.6 billion, Rp. 170.1 billion, Rp. 853.7 billion and Rp. 395.9 billion, respectively. Proved and Probable Reserves (million tons) Proved Reserves Probable Reserves Total Proved and Probable Reserves Lati: Seam PQRT 52 81 133 Seams A to O 7 11 18 Subtotal 59 91 150 Binungan: Blocks 1 to 2 5 2 7 Blocks 3 to 4 1 0 1 Block 5 to 6 1 0 1 Block 7 East 28 33 61 Block 7 West 5 4 9 Parapatan 12 7 19 Block 8 (Kelai) 0 45 45 http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 32 of 41 11/20/2010 1:03 AM
  33. 33. Subtotal 52 90 142 Sambarata: Block A 0 0 0 Block B East 5 3 8 Block B West 10 2 12 Block B1 20 13 33 Subtotal 35 19 54 Total 146 200 346 Exploration Berau Coal conducts exploration activities at its existing mines on an ongoing basis. To support its planned production growth, Berau Coal intends to continue exploration activities in its existing mines and has begun exploring other areas in its concession area for additional coal reserves. Berau Coal has commenced exploration activities at the eastern area of Sambarata Block B, new seams in Binungan Block 7, Binungan Block Parapatan and Binungan Block 8. In addition, Berau Coal has commenced exploration activities at new seams in the northern part of the Lati mine and Binungan Block 9 in July 2009 and plans to commence exploration of Sambarata Block BC in 2011. Berau Coal is targeting to complete all exploration activities of its concession area by 2011 as it believes that it will be able to plan its mining operations more efficiently to achieve its target production if it has a complete knowledge of the coal reserves in its concession area. In order to do this, Berau Coal has increased the manpower and drilling equipment used in exploration activities and has engaged an additional drilling contractor. Berau Coal's exploration activities include data collection, geological modelling and financial evaluation. Data collection is the process of identifying the location, layout and quality of a coal deposit. It is based on field mapping, which is a survey of surface features, and borehole drilling, the depth of which varies between deposits depending on the depth and configuration of the coal seams. Field mapping and borehole drilling are typically supplemented by a geophysical survey. http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 33 of 41 11/20/2010 1:03 AM
  34. 34. To determine whether the commencement of mining is economically viable at a particular area, Berau Coal conducts a financial evaluation. This evaluation considers coal price, demand for the product, capital investment, mining, processing and transportation costs and defines the shape and size of the excavation. This is done by using manual pit designs and the Mincom MineScape pit design software. Berau Coal engages third party contractors for the provision of drilling services for its exploration activities. Drilling activities have commenced at the eastern area of Sambarata Block B, new seams in Binungan Block 7, Binungan Block Parapatan, Binungan Blocks 8 and 9. New seams at the northern part of the Lati mine have also been explored and drilling activities commenced in July 2009. Berau Coal has also engaged a third party contractor to conduct geophysical logging at the exploration areas. In 2007, 2008, 2009 and the nine months ended September 30, 2010, Berau Coal incurred US$2.6 million, US$3.4 million, US$4.7 million and US$13.7 million, respectively, in exploration capital expenditures. Berau Coal has planned capital expenditures relating to exploration activities of US$9.6 million in 2010. Selected Financial Information The below statements have been derived from financial statements as of and for the years ended December 31, 2007, 2008 and 2009, which have been audited by KAP Tjiendradjaja and Handoko Tomo (formerly KAP Handoko Tomo), independent public accountants, and unaudited financial statements as of and for the nine months ended September 30, 2009 and 2010. Financial statements are reported in Rupiah, and functional currency is the Rupiah. Berau prepares and presents financial statements in accordance with Indonesian GAAP. (Rp in billions) Year ended 31 December, Nine months ended 30 September, http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 34 of 41 11/20/2010 1:03 AM
  35. 35. (Rp in billions) As at 31 December, As at 30 September, 2007 2008 2009 2009 2010 (unaudited) (unaudited) Balance sheet data Total current assets Rp.1,462.9 Rp.2,820.8 Rp.4,448.2 Rp.3,969 Rp.5,986 Total non-current assets(1 ) 3,378.5 4,078.6 7,832.6 3,920.8 9,604.7 Total assets 4,841.4 6,899.4 12,280.8 7,889.7 15,590.5 Total current liabilities 1,344.9 2,383.4 5,482.1 5,371.6 3,144.9 Total non-current liabilities(1 ) 2,904.7 3,113.9 2,968.6 108.5 6,960.4 Total liabilities 4,249.6 5,497.3 8,450.7 5,480.1 10,105.3 Minority interest in net assets of consolidated subsidiaries 523.1 1,024.5 324.5 1,502.5 416.2 Total equity 68.7 377.6 3,505.6 907.1 5,069 Total liabilities and equity Rp.4,841.4 Rp.6,899.4 Rp.12,280.8 Rp.7,889.7 Rp.15,590.4 Notes: (1) Deferred financing charges were offset with short-term loan as of December 31, 2009 and senior notes as of December 31, 2007 and 2008 to http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 35 of 41 11/20/2010 1:03 AM
  36. 36. conform to the March 31, 2010 consolidated financial statements presentation. (Rp in billions) Year ended 31 December, Nine months ended 30 September, 2007 2008 2009 2009 2010 (unaudited) (unaudited) Statement of cash flow data Net cash flow from operating activities(1 ) Rp.281.2 Rp.1,048.5 Rp.2,372.4 Rp.1,511.3 Rp.1,170.4 Net cash flows provided by (used in) investing activities (264.0) (201.4) (3,697.7) (554.1) (3,879.2) Net cash flows provided by (used in) financing activities (6.4) (266.0) 2,115.9 (329.4) 2,730.6 Effect of exchange rate changes(1 ) 1.8 (88.0) (13.1) (119.8) (76.7) Net increase in cash and cash equivalents 12.6 493.1 777.5 508.1 (55.0) Cash and cash equivalents at the beginning of the period 520.7 533.3 1,026.4 1,026.4 1,803.9 Cash and cash equivalents at the end of the period Rp.533.3 Rp.1,026.4 Rp.1,803.9 Rp.1,534.5 Rp.1,748.9 Notes: (1) Effect of exchange rate changes on cash and cash equivalents are presented separately from cash flows from operating activities. http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 36 of 41 11/20/2010 1:03 AM
  37. 37. 6. Conversion of Founder Shares and possible future conversion of Founder Securities Completion of the Acquisition gives the holders of the Founder Shares and the Founder Securities the right to exchange those shares and securities for Ordinary Shares, subject to, and in accordance with, the Articles of Association of the Vallar Subsidiary. The Founder Shares and the Founder Securities are designed to encourage the Vallar management team to achieve the Company's objectives and to create shareholder value following an acquisition. The Founder Shares and, dependent upon the future performance of the Group following the completion of the Acquisition, the Founder Securities may, therefore, be exchanged for Ordinary Shares to be issued to existing and future members of the Vallar management team. ends Exchange rates of US$1 = 8,924.5IDR, and £1 = US$1.61515 have been used to determine the consideration prices. This announcement has been issued by and is the sole responsibility of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by J.P. Cazenove or by any of its affiliates or agents as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. J.P. Morgan Cazenove, which is authorised and regulated by the Financial Services Authority, is acting for the Company in connection with the proposed Acquisition and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of J.P. Morgan Cazenove. Credit Suisse, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Bumi, Berau and the Bakrie Group and no one else in connection with the transaction and will not be responsible to anyone other than the aforementioned for providing the protections afforded to clients of Credit Suisse nor for providing advice in connection with the transaction or this announcement or any matter referred to herein. http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 37 of 41 11/20/2010 1:03 AM
  38. 38. This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, issue, subscribe for, sell or otherwise dispose of any securities, nor any solicitation of any offer to purchase, otherwise acquire, issue, susbscribe for, sell or otherwise dispose of any securities. This announcement is not an offer of securities for sale or a solicitation of an offer to purchaser securities. The securities of the Company referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States unless they are registered with the U.S. Securities and Exchange Commission or an exemption from the registration requirements of the Securities Act is available. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions. This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security, therefore this announcement does not constitute a public offering in Indonesia under Law Number 8 of 1995 regarding Capital Market. Certain statements in this announcement are forward-looking statements which are based on the Company's, expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. No statement in this announcement is intended as a profit forecast and no statement in this announcement should be interpreted to mean that earnings per Vallar ordinary share for the current or future financial years would necessarily match or exceed the historical published earnings per Vallar ordinary share. http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 38 of 41 11/20/2010 1:03 AM
  39. 39. APPENDIX DEFINITIONS The following definitions apply throughout this announcement, unless the context requires otherwise: "Acquisition" means the acquisition of the Acquisition Shares, or if either of the Transactions does not close, the acquisition of those Acquisition Shares actually purchased by the Company and/or the Subsidiary; "Acquisition Shares" means the Bumi Shares or the Berau Shares; "Bakrie Group" means B&BR and Long Haul Holdings Ltd; "BCE Lock-up" means the statutory lock-up under Indonesian law pursuant to which Mutiara is restricted from transferring its holding of Berau Shares until 7 April 2011; "Berau" means PT Berau Coal Energy Tbk; "Berau Shares" means shares of Rp.100 each in the share capital of Berau; "Berau Transaction" means the purchase of the Berau Shares; "B&BR" means PT Bakrie and Brothers Tbk; "Board" or "Board of Directors" means the board of directors of Vallar from time to time; "Bumi" means PT Bumi Resources Tbk; "Bumi Transaction" means the purchase of the Bumi Shares; "Bumi Shares" means shares of Rp.500 each in the share capital of Bumi; "Combined Code" means the Combined Code on Corporate Governance published in June 2008 by the Financial Reporting Council; http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 39 of 41 11/20/2010 1:03 AM
  40. 40. "Consideration Shares" means Ordinary Shares issued as consideration in connection with the Transactions; "Directors" means the directors of Vallar from time to time; "EBITDA" means earnings before interest, tax, depreciation and amortisation; "FSA" means the UK Financial Services Authority; "EBITDA" means earnings before interest, tax, depreciation and amortisation and is a non GAAP measure; "Founders" means Nathaniel Rothschild and James Campbell; "Founder Shares" means the B ordinary shares in the capital of the Vallar Subsidiary as more fully described in the prospectus published by the Company on 9 July 2010; "Founder Securities" means the C ordinary shares in the capital of the Vallar Subsidiary as more fully described in the prospectus published by the Company on 9 July 2010; "GW" means Gigawatt of power; "Group" means the Company and the Vallar Subsidiary; "Indonesia" means the Republic of Indonesia; "Initial Berau Closing" means the granting of an indirect economic and voting interest in Berau to Vallar through arrangements entered into with Mutiara; "Listing Rules" means the Listing Rules published by the FSA; "IPO" means initial public offering; "London Stock Exchange" means London Stock Exchange plc; "Mt" means millions of tonnes; "Mutiara" means PT Bukit Mutiara; "MW" means Megawatt of power; "Official List" means the Official List of the FSA; "Ordinary Shares" means ordinary shares of £1.00 each in the share capital of the Company; "Recapital" means PT Recapital Advisors; "Suspended-voting Ordinary Shares" means the suspended voting ordinary shares of £1.00 each in the share capital of the Company, the relevant restrictions as set out in http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 40 of 41 11/20/2010 1:03 AM
  41. 41. the share purchase agreements entered into in respect of the Transactions which are designed to keep the Bakrie Group below a 30% voting interest in the Company; "Transactions" means the purchase of the Berau Shares and the Bumi Shares, and each a "Transaction"; "UK" or "United Kingdom" means the United Kingdom or Great Britain and Northern Ireland; "United States" or "US" means United States of America, its territories and possessions, any state of the United States and the District of Columbia; "Vallar" means Vallar Plc; "Vallar Shares" means Ordinary Shares and Suspended-voting Ordinary Shares; "Vallar Subsidiary" means Vallar Holding Company Limited; "£", "GBP", "sterling" and "pence" means the lawful currency of the UK; "Rp." or "IRD" and "Indonesian rupiah" means the lawful currency of Indonesian; "$", "US$", "USD" and "US Dollars" United States dollars, the lawful currency of the United States This information is provided by RNS The company news service from the London Stock Exchange END ACQUNSNRRUAAARA http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com... 41 of 41 11/20/2010 1:03 AM

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