By Alex MacDonald
LONDON--The co-founder and former director of U.K.-listed Bumi
PLC (BUMI.LN) said Monday that 11 investors, including Bumi's five
largest independent shareholders, have backed an alternative
proposal to the powerful Indonesian Bakrie family that would allow
the company to continue operating as an Indonesian coal miner.
Nathaniel Rothschild said the 11 investors constitute a large
enough shareholder base to block any proposal from the Bakrie
family if it were put to a vote, a move aimed at pushing Bumi's
board to favor Mr. Rothschild's alternative proposal over the
family's proposal.
Bumi's shareholders, including the Bakrie family, agree that
relations should be severed between the company and the family,
although they are split on the best way to remove the family from
the company after a board-room rift over corporate governance
issues and the launch of an independent probe into financial
irregularities caused the company's share price to plummet more
than 80% since last year's high.
The Bakrie proposal envisions canceling the family's
shareholding in Bumi and paying $1.2 billion in return for all of
Bumi's Indonesian coal assets.
Mr. Rothschild's proposal on the other hand envisions removing
not only the Bakrie family but also two major shareholders who are
board members and have close ties to the family. The move is aimed
at making sure that the family is unable to exert any influence
over the board in the future.
In the alternative proposal, Bumi would continue to hold its 85%
stake in Indonesian coal mining company PT Berau Coal Energy TBk
(BERAU.JK) rather than sell it the Bakrie family.
Mr. Rothschild said that he has received backing from Bumi's
five largest independent institutional shareholders: Abu Dhabi
Investment Council, Schroders Investment Management Ltd., Standard
Life Investments, Taube Hodson Stonex LLP, and Artemis Investment
Management LLP. He has also received commitments from mining
entrepreneur Robert Friedland and Hashim Djojohadikusumo, the
brother of Indonesian presidential front-runner and
general-turned-businessman Prabowo Subianto, to participate in the
alternative proposal.
"In my letter to the Board [sent Friday], I attached nonbinding
letters of support from these investors, which together with my own
commitment of $75 million represents a total of $342.5 million to
be made available in the form of new equity at Bumi," he said.
"My understanding is that the thresholds required by the Bakries
to see their proposal succeed cannot now be reached," he added.
The capital raised through the Bumi equity issue would be used
in conjunction with other Bumi funds to buy out chairman Samin Tan
and director Rosan Perkasa Roeslani, two large Bumi shareholders
who have close ties to the Bakrie family.
The counteroffer also proposes Bumi accept the Bakries' proposal
to buy back Bumi's 29.2% stake in Bumi Resources in exchange for
$278 million in cash, plus the Bakrie family's exit from its Bumi
PLC stake, only on the condition that Mr. Tan and Mr. Roeslani
agree to exit from the company's shareholding and board. Mr.
Rothschild and the investors would then inject cash into Bumi PLC
to buy out Mr. Tan and Mr. Roeslani at current share prices.
Write to Alex MacDonald at alex.macdonald@dowjones.com
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