Shareholders Reject Rothschild Proposal, Split with Bakrie Group Can Go ahead
The Bakrie Group is most likely to continue its separation from Bumi Plc, the London-listed coal miner, after an extraordinary shareholders' meeting yesterday rejected the proposal of British financier Nathaniel Rothschild to replace 12 of the 14 board members. This outcome means that the Bakrie Group can go ahead with its intention to separate from Bumi Plc as agreed by the board last week and will keep its assets in Bumi Resources, Indonesia's largest coal miner.
Bumi Plc was set up by Rothschild and the Indonesian Bakrie Group in 2010 by connecting huge coal resources in Indonesia to European investors' appetite for undervalued coal assets. However, after Rothschild accused Bumi Resources (in which Bumi Plc holds a 29.2 percent stake) of financial irregularities, the relationship between both sides soon deteriorated until a split was the only way out.
The Bakrie Group will swap its 23.8 percent stake in Bumi Plc for Bumi Plc's 10.3 percent stake in Bumi Resources. The remaining 18.9 percent of Bumi Plc's stake in Bumi Resources will be sold to the Bakrie Group for US $278 million in cash.