Nathaniel Rothschild, the financier at the center of a dispute with Indonesia’s Bakrie family over a London-listed coal investment, said he’s not bidding for its assets after sending a proposal to the board this month.
Bumi was co-founded by Rothschild and the Bakries in 2010 through a $3 billion deal that listed stakes of two Indonesian coal producers in London. Moves are afoot to unwind the investment after board room infighting. The Bakries have offered $1.2 billion as part of a proposal to acquire the 29 percent stake in PT Bumi Resources and 85 percent of PT Berau Coal Energy (BRAU) held by Bumi Plc.
Rothschild put forward an alternative to the Bakries’ approach, and this is being studied by Bumi Plc (BUMI)’s advisers and independent directors, according to a Nov. 5 statement from the London-traded company that didn’t elaborate on the proposal. Rothschild hired Morgan Stanley for advice, a person familiar with the 41-year-old’s plans said Nov. 2.
“I didn’t make a proposal for Bumi’s assets and this isn’t about Rothschild versus Bakrie,” Rothschild said yesterday in e-mailed comments to Bloomberg News. “I and a number of other investors have indicated that we want to see Bumi Plc retain its listing, have world-class corporate governance and remain invested in Indonesia, which is home to strategically and economically important thermal coal.”
A spokesman for Bumi Plc in London declined to comment.
At the heart of the feud are interests in coal deposits conveniently located for shipment to China, the world’s largest user of the fuel. The dispute intensified this year as investor losses mounted, and Rothschild quit the Bumi Plc board last month. Two probes, one in Indonesia and the other in London, are investigating the finances of Bumi Resources. (BUMI)
“This dispute is probably going to drag on for a while,” Michael Tjoajadi, president director of PT Schroder Investment Management Indonesia, which holds shares in Bumi Resources, said from Jakarta. “A dispute like this, involving the majority shareholders, could distract the company and hurt its performance.”
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 probe was prompted by the company’s audit committee “in view of the public notifications by a shareholder, Bumi Plc, and various reports, both in international and local media,” Jakarta-based Bumi Resources said that day.
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.
Bumi Resources fell 1.5 percent to 640 rupiah in Jakarta yesterday. The stock is down 71 percent this year. Bumi Plc slumped 3.8 percent to 266.3 pence in London trading, taking its 2012 decline to 70 percent.
Bumi Resources said it was holding a forensic audit focusing on the accounts for the financial years of 2010 through 2012. Reports from the probe are due with the Chief Justice of the District Court of South Jakarta within 90 days of the appointment of an auditor.
Bumi Plc said in a statement Nov. 9 it noted the Jakarta- based coal producer’s announcement and “has no further information on the matter at this time.”
The Bakries made their offer last month to help resolve “irreconcilable differences” with Rothschild. The financier has described the Bakries’ offer as not being in the interests of investors.
The probe instigated by Bumi Plc in September is linked to a $637 million writedown of development funds and exploration assets in Bumi Plc’s Dec. 31, 2011, year-end financial statement.
London-listed Bumi won’t make a recommendation on any possible transaction until the investigation is “appropriately advanced,” the company said Nov. 5.
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