Bumi said to favour Bakrie exit plan

LONDON: Bumi Plc, the London-traded venture founded by financier Nathaniel Rothschild, supports a plan to exit one of its two Indonesian coal investments, according to two people familiar with the matter.

Bumi Plc, which has hired advisers from Rothschild Group to study the proposal, is in favour of divesting its 29% holding in PT Bumi Resources as it seeks to sever ties with Indonesia’s Bakrie family, the people said, requesting anonymity as the deliberations are confidential.

Bumi Plc isn’t currently considering a separate US$947mil proposal from the Bakries to buy within six months its other Indonesian coal holding, an 85% stake in PT Berau Coal Energy Tbk, the people said. Bumi Plc hasn’t ruled out accepting a more formal bid for Berau in the future, they said.

The Bakries, who run a palm-oil-to-property-empire that started in Sumatra in 1942, last week offered to buy all of the assets of Londonlisted Bumi in a bid to help resolve “irreconcilable differences” with Rothschild and his fellow founders.

That would completely unwind the US$3bil deal struck by the 41-year-old financier and the Bakries in 2010 to create a London listing for the two Indonesian coal producers.

Rothschild, descendant of a centuries-old banking dynasty, quit Bumi Plc’s board this week following a dispute with the Bakries and chairman Samin Tan.

The US$1.2bil proposal from the Bakries, described by Rothschild as not being in the interests of investors, came almost threeweeks after Bumi Plc started a probe into potential financial “irregularities” at its Indonesian investments.

Bumi Plc rose 1.9% to close at 254 pence in London on Wednesday. The stock has slumped 71% this year, giving the company a market value of £612mil (US$989mil).

In Jakarta, shares of Bumi Resources and Berau Coal Energy were unchanged yesterday.

The initial findings of the investigation are expected within two weeks, one of the people said.