Vallar says no tender offer for Bumi even if it takes 51 pct - Reuters

* Vallar says Bakrie Group will remain controlling shareholder of Bumi/Vallar
* In talks with Bumi's institutional investors to swap shares in them for Vallar
* Says China Investment Corp wants to be a long-term partner of Bumi/Vallar
* Plans to focus on organic growth in the group

London-listed Vallar said on Monday it would not have to tender for the remaining shares in coal miner Bumi Resources if it achieved its aim of taking a stake of up to 51 percent as sister company Bakrie Group would remain Bumi's controlling shareholder.

Bakrie & Brothers , a major Vallar shareholder, told Reuters last month that the Jersey-based firm would increase its stake in Asia's biggest thermal coal exporter, Bumi Resources , to up to 51 percent by June this year.

Indonesian capital market law requires that a firm conducts a tender offer if it buys a majority stake in a Jakarta-listed company. However, Vallar will be exempt from the regulation if it can prove that the controlling shareholder is unchanged.

"Bakrie will always keep a large stake ... The Bakrie Group will stay as a controlling shareholder of the group [Vallar]," said Vallar's co-founder, Daren Morris, adding that the completion of talks with Bumi shareholders to swap their shares for stock in Vallar was expected in May.

A Vallar prospectus issued in February said Vallar would issue new shares for Bumi stock owned by other shareholders if there were future transactions to increase its ownership in Bumi.

The Bakrie Group, including Bakrie & Brothers, and the Rothschild banking dynasty joined forces in November for Vallar to take a 25 percent stake in Bumi and a 75 percent stake in Berau Coal Energy . The Bakrie Group will own 43 percent in Vallar, which will be renamed Bumi Plc.

Vallar will focus on expanding the group organically as it aims to produce up to 140 million tonnes of coal in 2013 from both Bumi and Berau, although it does not rule out acquisitions.

DEBT AND CIC
High debt levels and corporate governance have been the main concerns for investors in Bumi Resources and other firms linked to the politically connected Bakrie Group.
Bumi, which already controls 10 percent of the global thermal coal market, has $3.6 billion of net debt at high interest rates and its debt-to-equity ratio is 2.52, higher than other Indonesian coal miners, such as Adaro Energy at 0.68, according to ThomsonReuters Starmine.

Bumi obtained a $1.9 billion loan from China Investment Corp (CIC) , one of its biggest single creditors, in 2009 with a 12 percent annual interest rate.

"The level of leverage on Bumi is not an issue at all ... The issue obviously is that the cost of debt should be a lot lower," said Nathaniel Rothschild, Vallar co-chairman. "So if we're borrowing in London today we could borrow at between 8 to 8.5 percent."

Vallar is currently in talks with CIC to repay a first tranche of the debt worth $600 million in October and is looking for several options for payment, including cash and a debt for equity swap.

"CIC wants a long-term relationship with Bumi. They want to be a partner," Morris said.