ALL QUIET ON THE BUMI FRONT… IS GLASENBERG ABOUT TO ENTER STAGE LEFT?
It’s been a couple of weeks now since any real news on Bumi and all remains eerily quiet… All the while, the stock remains resolutely pinned to the 260-270p level.
We continue to believe that Bumi presents the best potential Xmas or New Year present in the mining sphere given the £4+ that is presently on the table and the desire of all parties (ol Natty, Bakrie and Tan) to retain the prized assets in Indonesia. One has to accept that they all know the assets better than anyone and the fact that they each want them speaks volumes. Natty thinks the assets worth north of £10 per share, ditto with Tan and the Bakries just need to find some cash…. Which led me to do a bit of digging surrounding the history of Bumi and which does not seem to have been picked up by the financial media…
The Glasenberg connection
It seems the Bakries are friends with global mining billionaire Ivan Glasenberg of yes, you guessed it – Glencore. It was speculated last year in various quarters that Glencore may come to the aid of the Bakries by way of a loan backed by Bumi shares. Hmmm… The Sunday Telegraph reported without citing sources, that Glencore was looking at providing some sort of “quasi-debt facility” to support the family.
At the time of the speculation surrounding the Bakries loan financing and in which they were ultimately bailed out by Samin Tan to the tune of $1bn, various analysts stated openly that Glencore would be an obvious buyer of any Bakrie shares, given that it signed a share swap agreement with the Bakries last year over 4.8 percent of the company and it marketed Bumi’s coal.
In fact, during 2010, Glencore actually bought $200m of stock in PT Bumi (the Indonesian list) at a price materially higher than now. It is understood Glencore owns upto 5% of PT Bumi. Glencore is also a global marketing agent for Kaltim Prima Coal, Bumi’s main coal mining unit.
You’ll begin to see where I’m going with this – what chance that the Bakries and Tan join forces with Glasenberg to buy out the minorities in Bumi Plc to get a clean sweep of control of both Berau Coal and PT Bumi (the only real way they can actually). In the tale that is Bumi, I wouldn’t rule anything out… One way or another, as the clock ticks, a resolution gets ever nearer and looking at the chart below the large flag formation that has been in the making over the last 3 months is just about to break. Our monies on the upside.