Bumi Resources up 7.5% and 40% of market volume. Stock has been quite volatile as it was down 6% in the morning session. Locals jumped in the stock on the back of the news that the three recent coal acquisitions may need majority shareholder approval and minority shareholder approval and therefore preserve Bumi’s operating cashflow.
Key issues:
Regulators are looking whether the three acquisitions constitute a material transaction (transaction amounts to more than 10% of revenue and 20% of equity). A material transaction needs to obtain shareholders approval (50% +1 vote of sharholders ). MINORITY shareholder approval NOT required.
The regulator are also looking into whether the transactions are affiliated (related party) with Bumi. Should this be the case, the acquisitions would require minority shareholder approval.
Finally, Indonesia’s capital market regulator also said that there’s an investigation into Bumi Resources’ acquisitions as to to determine if the coal mining company overpaid for the asset purchases
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