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Indonesian coal billionaire Low Tuck Kwong lost $5.78 billion of his fortune, about a third, after he and his daughter sold 30.25% of Bayan Resources to fellow tycoon Andi Syamsuddin Arsyad at a steep discount to the market price.
The drop was the biggest one-day loss of Low's career and the largest among the world's richest people on Oct. 12, according to the Bloomberg Billionaires Index. He is now worth an estimated $11.3 billion, down from about $17.1 billion, and his fortune has more than halved since the start of the year.
Low and his daughter, Elaine Low, sold about 10.08 billion Bayan shares to PT Jhonlin Baratama, the investment vehicle of Arsyad, who is better known as Haji Isam, in a negotiated trade on the Indonesia Stock Exchange on Oct. 7. Bayan said it received notices on Oct. 8 that the transaction had been completed.
A sale at a fifth of the market price
The shares changed hands at 2,588 rupiah each, or about 14 cents, for a total of roughly 26.09 trillion rupiah, about $1.46 billion, Bloomberg Technoz reported. That was about 80% below Bayan's closing price of 13,450 rupiah, or about 75 cents, the day before the trade. At that price, the stake would have been worth about 135.6 trillion rupiah, or about $7.6 billion.
The gap between the sale price and the market value of the shares accounts for most of Low's paper loss. Bayan's stock fell 6.1% to 12,625 rupiah in the first session after the trade was disclosed and is down almost 20% this year.
Low sold 10.07 billion shares and Elaine Low sold 16.7 million. His direct stake fell from 40.15% to 9.95%, while hers slipped to 22.05%, leaving the family with a combined 32%, more than the 30.25% now held by Jhonlin Baratama.
Neither the sellers nor Bayan have explained why the shares were sold so cheaply. In August, Bayan director Jenny Quantero said the controlling shareholder might look for ways to "maximize their investment in the company."
How the deal came together
The two sides signed a conditional agreement on Sept. 16 for 10 billion shares, or 30% of the company, without disclosing a price. They amended it in early October to add 84 million shares, taking the stake to 30.25%.
The deal followed a difficult few weeks for Bayan. In September, the company and three of its subsidiaries declared force majeure on coal supply obligations because the government had not approved revisions to their mining quotas, Reuters reported. The revisions were later approved and the declaration was lifted.
Haji Isam founded the Jhonlin Group, a coal and palm oil conglomerate based in South Kalimantan, and controls the listed palm oil company PT Jhonlin Agro Raya. In August, reports that he would buy into Bayan through Jhonlin Agro Raya were denied by both companies.
The coal king
Low was born in Singapore, moved to Indonesia and became an Indonesian citizen. He founded Bayan in 2004 and built it into one of Indonesia's largest and most profitable thermal coal miners. The company produced about 68 million tonnes of coal last year and earned $943 million in net profit on revenue of $3.43 billion, according to The Business Times.
He is also the controlling shareholder of Singapore-listed Metis Energy. Bloomberg's index attributes the family's Bayan shares to him as the company's founder, which is why his estimated fortune moves with the coal miner's stock.
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