M&A Case

PT. Batubara Sejahtera (BS) is a public company operating a major coal mining in
Kalimantan. Currently BS is working together with several other mining companies which
run a refinery and mining transport business. One of the companies is PT. Olahbara
Trimitra (OT). OT is responsible to transport the coal from BSs mine to OTs refinery.
Down the line, OT will also responsible to process the coal.

As time goes by, BS feels that they could cut out the expense on processing their coal if
they could control their own refinery. As the cost of building refinery is beyond their
feasible calculation, BS plans to take over OT as an existing refinery company. If the take
over plan succeed, BS will control most of the process of coal mining in the area from the
start to the finishing process. In the same time, eliminate the need of contribution from
other refinery and/or mining transportation company.

The specific goals that BS is trying to fulfill after the take over plan is exercised are:

1. To simplify the process of their business, starting from the mining itself, transporting,
and refining the coal;
2. Simplifying the license for the whole process, so BS would not have to deal with too
many unnecessary licenses;
1. Reducing the amount of company related taxes;
2. Centralizing the control over the whole process so that the
company(ies) could run efficiently.

They have not decided which kind of take over will be most suitable
for the condition, whether by means of a merger or an acquisition.
BS approaches you to seek for an advice regarding to the plan.
Please provide an advice on which scheme will be most feasible to
the queries.
Loan Financing Case
Company X intends to acquire majority shares of PT A, an
Indonesian public limited liability company engaging its business
in financial sector (the Acquisition). In order to conduct the
Acquisition, Company X requires a large amount of funds from
other third party. Company X is having a good business
relationship with Company Y who is interested in providing a
financing for the Acquisition by Company X (the Financing). By
providing such Financing, Company Y expects that in the future
he would have a right to acquire certain numbers of shares of PT
A.

Company X and Company Y should come up with the most

effective and efficient structure which gives benefits for both
parties. The structure itself shall consider all legal, financial and
tax aspects for both parties.
 Choose either M&A or Loan
Financing Case
In M&A case, choose either
to be BS company or OT
company
Remember all the important
issues in the presentation,
for M&A and Loan Financing
Negotiate those issues!

In Loan Financing case,

choose either to be
Company X or Company Y

Make a list Negotiate

1. How much Price
2. One Drawdown or Revolving How soon can the asset be
3. Specific Purpose or General transferred
Purpose Any restriction on the
4. Interest assets
5. Default Interest Payment of purchase price
Warranty
6. Installment Schedule
No claim
7. Prepayment Shareholders control
8. Negative covenants
9. Positive covenants

Financing Acquisition