Vallar to lift BUMI stake to 50%, shakes up structure

* To buy 75 pct of Bumi Resources Minerals (BRM) from Bumi

* Bumi to get $2.07 bln in convertible notes for BRM stake

* Vallar to lift stake in Bumi to up to 50 pct

* Simplified structure prepares group for FTSE 100 entry 

LONDON, June 10- 

London-listed Vallar (VAAR.L) will lift its stake in Indonesia's Bumi Resources (BUMI.JK) to up to 50 pct and take a majority holding in a subsidiary, as part of an attempt to simplify its structure and pave the way for a spot in the FTSE 100.

Vallar, an acquisition vehicle set up by Nathaniel Rothschild, will buy a 75 percent stake in Bumi Resources Minerals (BRM) (BRMS.JK) from Bumi Resources for $2.07 billion of convertible bonds, adding base metals, iron ore and some precious metals assets to its core focus on coal.

The bonds will be convertible into shares in Vallar's new parent company Bumi Plc, which Vallar hopes will enter the FTSE 100. 

"This move to scale up and diversify the business, get operational control of more assets and provide a pathway to the refinancing of Bumi's expensive debt are all positives for the stock which appear to have been achieved at an acceptable price," said Liberum Capital in a note.

"Few mainstream institutional investors have focussed on Vallar till now - we feel this could trigger their taking a closer look," it added. BRM assets include an 18 percent economic interest in Newmont Nusa Tenggara, the company that owns the Batu Hijau mine, and offers exposure to high quality long-life copper and gold, Vallar said.

Vallar also confirmed plans to boost its stake in Bumi Resources, Asia's biggest thermal coal exporter, from 25 percent to between 40 and 50 percent. A share above 50 percent would trigger a tender offer. 

It has not given a timing on the move, though Bakrie & Brothers (BNBR.JK), a major Vallar shareholder, told Reuters in March that the increase would come by June. 

Vallar is set to publish by the end of June the premium listing prospectus that will result in the introduction of new parent company Bumi Plc to replace it on the London Stock Exchange.

Vallar, Rothschild's mining vehicle, underwent a major transformation last year, with the Bakrie Group and the Rothschild family joining forces for Vallar to take a 25 percent stake in coal miner Bumi and a 75 percent stake in Berau Coal Energy (BRAU.JK).

The Bakrie group will own 43 percent in the combined London-listed company, which will be renamed Bumi.

JP Morgan Cazenove is sole advisor to Vallar and joint broker with Credit Suisse.

Rothschild announced his intention to float his second acquisition vehicle, this time focused on oil and gas assets, on Thursday. He said on Friday there were "categorically" no plans for further projects. Source: Reuters