Darma Henwa, Prove Energy & Corfield takeovers
Coal mining contractor PT Darma Henwa Tbk (DEWA), an affiliated of coal miner PT Bumi Resources Tbk (BUMI), were in frenzy acquisitions last year. However, the actions have raised questions.
The story of the takeovers began on May 22 2007 when Darma Henwa acquired Prove Energy Investments, a British Virgin Islands-based SPV, from Zurich Asset International, a Seychelles-based company, worth US$93.88 million.
Prove was a controlling shareholder of 66.7% stake in coal marketing company dubbed Coal Vista Resources, another Seychelles-founded company. Coal Vista’s office has the same address with Zurich Asset at Oliaji Trade Center, first floor, Victoria, Seychelles.
Then, Prove Energy on July 2011, disposed 100% stake in Coal Vista to Thionville Financier. If you check in the 2011′s audited financial statement filed by Darma Henwa to Indonesia Stock Exchange, still, there was not sufficient information about the business of Prove Energy after it sold Coal Vista.
One month after the sale, Darma Henwa on August 11 2011, bought 100% stake in Corfield
Investments Limited from Joyful Sky Ltd at a certain price equals with its book value. Darma Henwa’s financial statement did not clearly mention about the price of the takeover.
The financial statement mentioned that Darma Henwa controlled 100% stake in Corfield that owned assets worth US$30.92 million.
A day after the Corfield’s takeover, Prove Energy, that was 100% owned by Darma Henwa, suddently issued 40,000 new shares to Corfield Investments, diluting DEWA’s stake in Prove to 20%. It means 40,000 shares equalled to 80% stake in Prove.
The questions are if DEWA controlled 100% stake in Prove Energy, why Prove Energy diluted DEWA’s stake to Corfield, while Corfield was 100% owned by DEWA as well?
Assuming the takeover of Corfield was priced at US$30.92 million (the same value of Corfield’s assets), does it mean that DEWA spent US$120 million for Prove Energy and Corfield’s takeovers.
Was it necessary for Corfield to buy 40,000 shares issued by Prove Energy while DEWA still owned 100% stake in Prove Energy? What was the purpose of the shares issuance?
Disclosure: No position at the stocks mentioned above.