Vallar Announces Major Reorganisation

Vallar announces today the intention to acquire a 75 per cent. holding (on a fully diluted basis) in BRM from Bumi Resources. The acquisition price of Rp.850 per share represents a 21.9 per cent. premium to BRM's thirty day average closing price of Rp.697 per share to 27 May 2011 and a total consideration of approximately US$2.07 billion paid by Vallar, through its proposed new parent company Bumi plc, to Bumi Resources in the form of listed convertible bonds, which are convertible into new Bumi Voting Ordinary Shares (the "Convertible Bonds").

The key terms of the Convertible Bonds will be as follows:

• Issuer: a wholly-owned subsidiary of Bumi plc
• Guarantor: Bumi plc
• Currency: US$
• Underlying shares: Bumi Voting Ordinary Shares
• Listing: Official List of the FSA and trading on the Professional Securities Market of the London Stock Exchange
• Maturity: five years and six months from the Issue Date (the "Maturity Date")
• Cash coupon: 2.0 per cent. per annum, payable semi-annually in arrear commencing on the date that is six months after the Issue Date
• Conversion price: £15.88, representing a 21.9 per cent. premium to the thirty day average Vallar Voting Ordinary Share closing price of £13.03 per share to 27 May 2011
• Conversion period: from 40 days following the Issue Date until the fourteenth calendar day prior to the Maturity Date. No Convertible Bond is convertible when held by or on behalf of Bumi Resources
• Issuer call: non-callable for three years following the Issue Date. Thereafter callable at par plus accrued interest provided that the Bumi Shares are trading at 130 per cent. of the conversion price for a period of 20 out of 30 trading days.

The Convertible Bonds will be convertible into a maximum of approximately 79 million new Bumi Voting Ordinary Shares at the initial conversion price.

The BRM Proposal is expected to complete in the third quarter of 2011 and will require approval of Bumi Voting Ordinary Shareholders. Bumi proposes to engage with the Indonesian regulator to review whether a mandatory tender offer for the remaining shares in BRM would be required as a result of the reorganisation.

Simplification of corporate structure
The BRM Proposal will result in the simplification of Vallar's corporate structure by providing the Company with direct exposure to the BRM portfolio. In addition, the BRM Proposal will benefit Vallar through stronger corporate governance across the group.

Creation of enhanced asset portfolio with access to attractive commodities in emerging markets
Through the BRM Proposal, the Company will augment its core focus on coal by adding a portfolio of base metals, iron ore and precious metals assets across multiple geographies. Vallar believes in the asset quality and competitive strengths offered by BRM and the robust industry fundamentals of copper, zinc-lead, iron ore and gold underlying the business.

BRM's 18.0 per cent. economic interest in Newmont Nusa Tenggara ("NNT"), the company that owns the Batu Hijau mine, offers exposure to a significant interest in a world-class, high quality, long-life copper and gold mine. BRM's attractive portfolio of development projects, including its 80.0 per cent. holding in the Dairi Prima zinc-lead project, offers attractive near term revenue growth opportunities whilst its exploration projects offer significant additional growth opportunities.

Platform to execute a diversified mining expansion strategy
The BRM Proposal will diversify the Company's current geographical and commodity footprint, allowing Vallar to benefit not only from strong fundamentals and assets in the coal sector, but also the value creation potential in early stage development and exploration assets. Furthermore, gaining direct exposure to BRM offers Vallar the strategic flexibility in the development of the BRM assets, whilst simultaneously increasing BRM's financing options to develop its projects.

Best use of management to deliver value to shareholders
BRM's management will continue to play a critical role within the enlarged Company and will allow Vallar to align the management of the enlarged Vallar to best utilise management's strengths across the entire business portfolio. Given the scale and unique opportunities offered by the Company, it is the intention of the Vallar board of directors and management to further attract additional world-class talent.

Continued delivery on Vallar strategy
The BRM Proposal represents a continuation of 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. Source: Oilvoice