Indonesia's record leveraged buyout explained

Author: Brian Yap | Published: 5 Jul 2016

EMR Capital and Farallon Capital have overcome unprecedented multi-jurisdictional regulatory issues in their $775 million leveraged buyout of one of the world's largest goldmines.

Australian private equity giant EMR and its US-based counterpart Farallon led an international consortium to secure a 95% stake in Indonesia’s Martabe mine from Hong Kong-listed G-Resources on March 17.

Counsel involved in the deal point to a host of regulatory hurdles, from mining and export license laws in Indonesia to listing rules in Hong Kong that threatened to derail the transaction.

"Negotiating the transaction was challenging due to the complexity of the financing, various parties' requirements, regulatory constraints, and the overall market at that time," said John Brewster, partner at Clayton Utz in Melbourne. Brewster attributes part of the deal’s complexity to the vendor’s status as a Hong Kong-listed company, whose disposal of its mining assets were categorised by the HKEx stock exchange as...