By Alex MacDonald
LONDON--U.K.-listed Indonesian coal miner Bumi PLC (BUMI.LN)
said Friday that its co-chairman Indra Bakrie has resigned with
immediate effect, marking the third director to leave the company
since a probe was launched into alleged financial and other
irregularities at the company's Indonesian assets.
In his letter to the Bumi board of directors, Mr. Bakrie said it
was appropriate for him to resign from Bumi's board after the
Bakrie Group, a large conglomerate owned by the powerful Indonesian
Barkie family, submitted a proposal to Bumi's board to exit its
23.8% stake in the London-listed miner and buy back all of Bumi's
Indonesian coal assets in the process for around $1.2 billion in
cash.
The resignation comes ahead of Bumi's London board meeting on
Wednesday in which board members are likely to discuss the Bakrie
proposal after reviewing reports from U.K.-based law firm
Macfarlanes and investment bank Rothschild Group on the probe and
the fair value of the proposal, respectively. A person familiar
with the matter said the board was unlikely to make a formal
recommendation regarding the Bakrie proposal, but he didn't rule
out the possibility.
Macfarlanes is conducting an independent probe into alleged
financial irregularities largely focused on about $600 million in
development funds at Indonesia's largest coal miner, PT Bumi
Resources TBk (BUMI.JK), in which Bumi PLC owns a 29% stake, while
the Rothschild Group is carrying out fairness opinions on any
proposals made to the board.
So far, the board has received one proposal from the Bakrie
family and a letter suggesting an alternative proposal from a
consortium led by European financier and Bumi PLC co-founder
Nathaniel Rothschild, who isn't affiliated with the bank that bears
his family name.
The Bakrie family made a proposal almost two months ago in which
they offered to sever their ties with Bumi PLC via three
transactions after a chequered history of boardroom spats regarding
corporate governance and the probe launch, which caused the
company's shares to plummet.
The first Bakrie transaction involves the Bakrie family giving
up its 23.8% stake in Bumi PLC for 10.3% of Bumi Resources. The
Bakrie family would then pay $278 million in a second transaction
to buy out Bumi PLC's remaining 18.9% stake in Bumi Resources. In a
third transaction, the Bakrie family has offered to buy out Bumi's
remaining asset, an 85% stake in Indonesian coal producer PT Berau
Coal Energy TK (BRAU.JK) for about $950 million sometime next year,
although analysts question how the debt-laden family would be able
to raise the funds for such a deal.
Mr. Rothschild, who stepped down from Bumi's board two months
ago due to co-chairman Tamin San's inclination to accept the Bakrie
proposal, has also put forward an alternative proposal, which
involves accepting the Bakrie family's first two proposals but not
the third. The Rothschild proposal would also inject $270 million
into the company via a consortium of investors to remove Mr. Tan
and another large Bumi PLC shareholder, Rosan Perkasa Roeslani,
from the board and Bumi's shareholding.
The first director to leave was Ari Hudaya, president director
of Bumi Resources, who stepped down immediately after the
independent probe was launched into his company.
Write to Alex MacDonald at alex.macdonald@dowjones.com
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