By Ben Otto
JAKARTA--Indonesian conglomerate Bakrie Group plans to sever its
ties with coal miner Bumi PLC (BUMI.LN), and take the Indonesian
assets it brought in to the London-listed company.
Bakrie's proposal to split with Bumi PLC comes after more than a
year of disputes among shareholders, and after Bumi PLC said last
month a probe into financial and other irregularities at its
Indonesian operations was under way.
Bakrie Group has an indirect 23.8% stake in Bumi PLC via two
units, and co-founded London-listed Bumi with British-born
financier Nat Rothschild.
Bakrie Group is seeking to cancel its entire stake in the
London-listed company for more control of the coal producer's
Indonesian unit, Bumi Resources.
Bumi PLC holds a stake of just over 29% in Bumi Resources.
Bakrie said it plans to buy back Bumi PLC's remaining 18.9% stake
in the Indonesian unit before the end of the year if it withdraws
from Bumi PLC.
Bumi PLC said in a statement that PT Bakrie & Brothers
(BNBR.JK) and Long Haul Holdings have proposed cancelling their
stakes in Bumi PLC in exchange for their equivalent value in
Indonesia-listed Bumi Resources, or a 10.3% stake.
Funds to finance the buyback will come from Indonesian
businesspeople close to owners of the Bakrie Group, people familiar
with the matter told Dow Jones Newswires.
"Valuation aside, this looks like good news for Bumi PLC, in our
view, as it could walk away with its reputation intact and some
cash in the" bag, Numis Securities said in a research note.
"Losing its main assets would be a disappointment but given the
soggy coal markets and dark cloud surrounding the company, this
might be a good way to move on."
Bakrie Group also proposed making a cash offer for Bumi PLC's
84.7% stake in PT Berau Coal Energy Tbk (BRAU.JK) within the next
six months, Bumi PLC said.
Bumi PLC said its board is considering all of the proposals.
The company's directors are in Singapore for a board meeting
Thursday. Several members of the board declined to comment on
details of the meeting.
Write to Ben Otto at ben.otto@dowjones.com
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