Bumi closer to split with the Bakries, says lacks proof family has cash for it
London-listed Bumi Plc (LON: BUMI) is moving ahead with its plans of splitting from Indonesia’s controversial Bakrie family, the firm co-founders, by calling its shareholders to approve the long-sought separation on December 4.
While the miner said it has received assurances from various parties that funds will be in place to complete deal, it noted it has no proof to back those assurances.
"We have repeatedly sought assurances on financing. They have both, [Bumi Chairman] Samin Tan and the Bakrie group, [said] that the financing will be in place when it comes to the closing of this transaction," said Bumi's Chief Executive Nick von Schirnding, but "we have not had proof of funding."
Investors will also be asked to support the change of Bumi’s name to Asia Resource Minerals, in an effort to cut ties with the coal miner’ eventful past. This has been tainted by boardroom battles over corporate governance, the discovery of $201 million of financial irregularities and the suspension of shares, among others issues affecting the firm this year alone.
In a statement released late Thursday, the firm said it has also began arbitration proceedings against Rosan Roeslani, a former director, for allegedly failing to meet a September 26 deadline to pay the first $30m instalment of an agreed $173m payment to Bumi to settle a dispute.
The intended separation will see the Bakries selling their stake in Bumi to their current partner and outgoing chairman Samin Tan. He became involved with the embattled firm in January last year, after acquiring a 47.6% stake for $1 billion from the Indonesian clan.
The family will then buy back Bumi's 29.2 % stake in PT Bumi Resources, Indonesia’s top coal exporter, for $501 million.
Bumi was created in 2010 when Nat Rothschild, descendant of the founder of the two-centuries old banking empire, used a cash shell, Vallar, to list the coal and other mining interest in London, providing the members of Sumatran family a high profile in the West in a $3 billion deal.