Bloomberg News

PT Borneo’s Tan Named Bumi Chairman After Rothschild-Bakrie Spat

March 27, 2012

Samin Tan, president director of Indonesian coal supplier PT Borneo Lumbung Energi & Metal, was appointed chairman of Bumi Plc (BUMI) as Nathaniel Rothschild stepped down as co-chairman following a boardroom dispute last year.

Tan, whose PT Borneo bought a 23.8 percent stake in Bumi in January from Indonesia’s Bakrie Group, was appointed yesterday, Bumi said today in a statement. Rothschild, who helped found London-listed Bumi last year, will remain on the board as a non- independent director. Chief Executive Officer Ari Hudaya was replaced by Nalin Rathod.

Ties between Rothschild and then chairman Indra Bakrie became frayed last year after Rothschild issued public a letter to Hudaya calling for a “radical cleaning up” of the Bakrie family’s Indonesian unit, PT Bumi Resources. The two biggest shareholders, the Bakries and PT Borneo, last month called for an extraordinary general meeting to oust Rothschild, Hudaya and others before dropping the plan less than two weeks later.

“Bumi is a textbook self-help story, a stock with a complex holding structure and an oppressive debt burden, but underpinned by tier-one operating assets,” Richard Knights, an analyst at Liberum Capital Ltd., wrote in a note yesterday.

The delivery of a clear corporate strategy by Tan “could go a long way to putting the board disputes of 2011 behind the company and begin re-rating,” Knights said.

Bumi rose 0.1 percent to close at 697.5 pence in London.

The company said it’s considering restructuring to simplify the group. A potential merger of PT Berau Coal Energy and Bumi is being studied, Tan and Rathod said on a conference call.

Ground to Cover

Bumi also said today it appointed Scott Merrillees as chief financial officer to replace Andrew Beckham. “The management changes will strengthen our team and also increase the presence of key executives in London,” Tan said in the statement.

The company today reported full-year underlying earnings of $33 million and posted a net loss of $319 million. Underlying profit in the first half was $54 million.

“The group has some ground to cover to establish confidence with investors in the business, starting with a revamped executive team,” Canaccord Genuity said in a note.

Rothschild, the only son of U.K. financier Jacob Rothschild, raised 707.2 million pounds ($1.1 billion) with former Anglo American Plc (AAL) executive James Campbell in July 2010 under plans to buy a mining asset for as much as $5 billion.

Bumi completed a $3 billion deal last year to acquire stakes in two coal producers in Indonesia, the world’s largest exporter of power station coal. Bumi owns about 85 percent of Berau and a 29 percent stake in PT Bumi Resources.

To contact the reporters on this story: Jesse Riseborough in London at jriseborough@bloomberg.net; Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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