Embattled Indonesian miner Bumi (LON:BUMI) has decided to toss its lot in with the Bakries following a protracted shareholder dispute between the prominent Sumatran business dynasty and European financier Nat Rothschild.
The Financial Times (paywall) reports that Sir Julian Horn-Smith, the senior independent non-executive director of Bumi, said the board preferred the Bakries’ offer to split from the company to the restructuring proposal submitted by Rothschild, which is contingent upon the sale by two Indonesian nationals – Bumi chairman Samin Tan and Rosan Roeslani, of their combined 33% equity stake.
Rothschild, who founded Bumi in 2011 and holds an 11% stake in the company, has expressed his disappointment in the board’s decision as it “had ignored the stated wishes of minority investors holding approximately 28% of the voting shares of the company.”
Under the plan submitted by the Bakries, who are 23.8% owners in Bumi, the family will swap their their shares in the company for a third of Bumi’s stake in Jakarta-listed Bumi Resources, which is controlled by the Bakries, and purchase the remaining stake for a $278 million consideration.
Rothschild has said he that he will continue to pursue his restructuring plan despite Sir Julian’s statement on Wednesday that the board did not believe him and that neither Tan or Roeslani are willing to sell their stake.
The establishment of Bumi in 2011 was a billion dollar deal that was supposed to bring two famous business dynasties together – one from the East and the other the West.
Nat Rothschild, descendant of the founder of the two-centuries old banking empire, used his family name to get big players – “and big players only” – to back him in a deal to bring a chunk of the vast business interests of the Bakrie family to the City of London.
Listing the coal and other mining interest in London provided the members of Sumatran family – one of whom has a good chance of becoming president of the world’s fourth most populous nation – a high profile in the West and at the same time gave Nat, 41, the chance to finally transform his popular image from that of a partying rich kid into a financier with true investment chops.
Barely two years after listing, however, Bumi plc is collapsing amid bitter recriminations, allegations of financial impropriety and a downturn in the market. Investors – including according to some reports members of the UK royal family – have lost three quarters of their money.
Shares in the beleagured Indonesian coal miner have plunged as a result of the protracted conflict between its key shareholders, closing down 4.85% in Wednesday trading while falling 70% in just the past year.
Image of Nat Rothschild courtesy of Youtube