Dec. 10 (Bloomberg) -- Indra Bakrie’s decision to quit as co-chairman of Bumi Plc, the London-listed coal company founded by Nathaniel Rothschild and the family-run Bakrie Group in 2010, is “meaningless”, according to Rothschild.
Bakrie told Bumi in a letter he is leaving “because the initial objective of the Bakrie Group in pursuing a London listing had not been met,” resulting in a proposal to exit the investment made in October, Bumi said in Dec. 7 a statement. “It was therefore appropriate that he resigned as a director of the company, the letter said,” according to Bumi.
The Bakries put forward in October a $1.2 billion proposal that would unwind the 2010 deal that grouped stakes in two Indonesian coal producers. Rothschild, who controls about 12 percent of Bumi voting stock and who quit the board in October, said last month he’d raised $270 million for a rival proposal that similarly sought to sever ties with the Bakrie Group.
Bakrie “has not attended a board meeting for almost a year and was content to do his business through Samin Tan,” Rothschild said in e-mailed comments to Bloomberg News, referring to Bumi’s chairman.
Bumi fell 0.3 percent to close Dec. 7 at 275.4 pence in London trading. The stock has slumped 69 percent this year. Rothschild sold shares in Vallar Plc, the precursor to Bumi, at 1,000 pence a share in 2010.
Rothschild said the drop in the share price since Tan’s involvement with the company highlights the need for Bumi’s independent directors to “act swiftly to prevent further value destruction.” Bumi stock has fallen 61 percent since Tan was appointed chairman on March 27.
Rothschild resigned as a director amid a feud with the Bakries and Tan, saying he’d lost confidence in the board. The boardroom infighting as well as investigations in London and Indonesia into potential financial irregularities have prompted moves to undo the $3 billion deal struck with the Bakries two years ago.
The proposal from 41-year-old Rothschild, whose ancestor helped bankroll Britain’s war against Napoleonic France, was sent to Bumi independent directors in October as he stepped up a battle for control of the group. He repeated demands for Tan and Rosan Roeslani, a director who indirectly controls about 13 percent of Bumi, to resign.
“We need to see the exit of Samin Tan, and Rosan Roeslani, before any semblance of normalcy returns to this company,” he said. Tan couldn’t immediately be reached by mobile phone. A London-based spokesman for the Bakries declined to comment.
Rothschild, who is being advised by Morgan Stanley, has also secured support from Hashim Djojohadikusumo, son of Sumitro, one of the architects of Indonesia’s economic programs in the late 1960s, a person familiar with his plans said last month. His proposal is being studied by Bumi’s advisers and independent directors, according to a Nov. 5 statement.
The Bakries have offered to acquire the 29 percent stake in Indonesian coal producers PT Bumi Resources and 85 percent of PT Berau Coal Energy held by Bumi Plc.
They’ve offered to exchange a 23.8 percent stake in Bumi Plc for 10.3 percent of Jakarta-based Bumi Resources. The group also made a conditional proposal to buy back the remaining 18.9 percent in Bumi Resources in cash by Christmas. In addition, it plans to offer $947 million for Bumi Plc’s 84.7 percent stake in Berau Coal Energy.
Bumi Resources, Indonesia’s top producer of power-station coal, said a court on Nov. 9 approved an independent investigation into its accounts dating back to 2010. Bumi Resources is part-owned by the Bakrie family.
The London-listed company announced Sept. 24 an inquiry into “potential financial and other irregularities” at its Indonesian operations, Bumi Resources and Berau Coal Energy.
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