Bumi Plc, the coal producer at the center of an ownership dispute, declined in London trading as a three-month suspension was lifted after the company advanced plans to separate from Indonesia’s Bakrie family.
The stock dropped 8.6 percent to 237 pence by the close, the lowest since Oct. 10, and valuing Bumi at about 571 million pounds ($878 million). Today was the deadline for Bumi to resume trade or face removal from FTSE London stock indexes.
Bumi agreed this month to sell its 29.2 percent stake in PT Bumi Resources to the Bakrie Group, as part of a two-step plan to separate from one of Indonesia’s wealthiest families. Bumi Chairman Samin Tan has agreed to buy the Bakries’ 23.8 percent holding in Bumi Plc for $223 million.
Bumi has been at the heart of a battle for control between co-founders Nathaniel Rothschild, scion of a centuries-old British banking dynasty, and the Bakries. The stock plunged 69 percent last year as Rothschild and the Bakries each made rival proposals to unwind the $3 billion deal that brought them together in 2011.
“This board is ushering through a value transfer to Samin Tan, of well in excess of £1 (a share) in value, and shareholders should hold out for a better deal,” Rothschild said today in e-mailed comments.
The stock was halted in London in April after the company said it wouldn’t meet a deadline to publish its financial results. Bumi reported $201 million in missing funds in May at unit PT Berau Coal Energy and said in June it had struck a deal to recover a majority of the amount.
Bumi has taken “considerable steps to enhance its internal systems and controls” in relation to Berau Coal, the company said in a statement. After the moves at Berau and talks with the U.K.’s Financial Conduct Authority, the board “believes that it is appropriate to restore trading,” it said.
Separately, Bumi Resources had its debt rating cut to Caa1 from B3 today by Moody’s Investors Service, seven levels below investment grade. The Jakarta-based coal exporter, Indonesia’s largest, has an August deadline to refinance a $150 million term loan with a further $360 million of loans at unit PT Bumi Resources Minerals maturing in September, it said.
“The downgrade reflects the increased refinancing risk,” Simon Wong, a Moody’s vice president and senior credit officer, wrote in the statement. “We expect interest costs to remain high even if Bumi Resources refinances its upcoming debt maturities, given the ongoing uncertainty over its separation from Bumi Plc.”