Shareholders of Bumi Plc (BUMI), the coal producer at the center of an ownership dispute between its founding partners, will vote next month on a proposed $501 million deal to separate it from Indonesia’s Bakrie family.
Chairman Samin Tan satisfied a condition of the deal around financing his $223 million share of the transaction to buy out the Bakrie’s 23.8 percent stake in Bumi, the London-listed company said today in a statement. A shareholder vote on the complex two-stage deal is now scheduled for the week of Dec. 16, with the transaction set for completion in January, Bumi said.
Bumi and the Bakries have been working on a separation since October last year after relations between the family and fellow founding partner Nathaniel Rothschild soured amid probes in Indonesia and the U.K. following allegations of financial irregularities. Rothschild, a scion of a centuries-old British banking dynasty, owns 21 percent of the voting shares and hasn’t revealed how he will vote on the deal which needs 50 percent of investors to approve it.
The coal producer dropped 0.1 percent to close at 221.75 pence in London trading yesterday, valuing the company at 534 million pounds ($873 million). A meeting to vote on the separation plan set for Dec. 4 was scrapped after Tan missed a deadline to provide proof of financing.
Bumi, who’s precursor Vallar Plc sold shares in an initial public offering at 1,000 pence apiece in London in 2010, owns stakes in two Indonesian coal suppliers.
As part of the Bakries’ exit plan, Bumi has agreed to sell its 29 percent holding in Jakarta-based PT Bumi Resources (BUMI) to the family for $501 million. If that deal is completed, Bumi will be left with a 76 percent holding in PT Berau Coal Holdings.
The London-traded company had yet to receive proof that the Bakries can finance their share of the transaction, Chief Executive Officer Nick von Schirnding said on Nov. 8. Funding has been available since January in the form of a “direct cash investment” from the family, Chris Fong, a Bakries spokesman, said the same day.
Investors should oppose the separation plan, according to Pensions & Investment Research Consultants Ltd., a U.K. adviser to institutional investors, while ISS Governance Services said shareholders should approve it, reports this month showed.
Changes to the proposed transaction from its original form last year, uncertainty over how Tan and the Bakries will finance it and a failure to recover $173 million of missing funds underpin the voting recommendations, PIRC said.
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