NEW YORK--European financier Nathaniel Rothschild said Thursday
that a consortium led by him is prepared to inject $270 million
into U.K.-listed Indonesian coal miner Bumi PLC (BUMI.LN) in order
to flush out all ties between the Bumi's board and the powerful
Indonesian Bakrie family.
Bumi PLC has received two proposals so far aimed at extricating
the embattled London-listed miner from an acrimonious relationship
with the Bakrie family, which owns a 23.8% stake in the Indonesian
company. The company's shares have plummeted due to a boardroom
rift over corporate governance issues and an independent probe into
financial irregularities at its Indonesian coal assets.
The Bakrie family has proposed severing its ties with Bumi PLC
by offering $1.2 billion to buy back Bumi's Indonesian coal assets
and in the process exit its 23.8% stake in Bumi PLC. The deal would
involve buying back Bumi's 29% stake in Indonesia's largest coal
producer Bumi Resources (BUMI.JK) and Bumi's 85% stake in
Indonesian coal miner Berau Coal Energy (BRAU.JK) for about $278
million and $950 million respectively in three separate
transactions.
Mr. Rothschild, a major shareholder and Bumi co-founder, reacted
to this proposal by resigning from Bumi's board, citing concerns
that minority shareholders weren't being protected given Chairman
Samin Tan's ties with the Bakrie family.
Mr. Rothschild instead suggested an alternative proposal in
which Bumi would accept the part of the Bakries' proposal which
involved buying back Bumi's 29% stake in Bumi Resources in exchange
for $278 million in cash plus the Bakrie family's exit from its
Bumi PLC stake. Mr. Rothschild, through the NR Investment-led
consortium would then inject more cash into Bumi PLC to buy out Mr.
Tan and another large Indonesian shareholder, Rosan Perkasa
Roeslani, from Bumi's board by offering compensation for their
shares.
Mr. Roeslani and Mr. Tan own shares in Bumi through investment
fund Recapital Advisors and Indonesian coking coal company Borneo
Lumbung Energi & Metal (BORN.JK) respectively. Recapital owns a
13% stake in Bumi, while Borneo owns 23.8%. Borneo holds its shares
in tandem with the Bakrie Group, a conglomerate owned by the Bakrie
family, through two special-purpose vehicles.
"NR Investments believes that the interrelated interests of Mr.
Tan and the Bakries amount to a concert party in respect of Bumi
PLC. Together with other investors, NR Investments has committed to
injecting $270 million into Bumi PLC to clear out these parties,"
Mr. Rothschild said in a statement.
Mining tycoon Robert Friedland has agreed to be part of a the
Rothschild-led consortium, two people familiar with the matter
said. Mr. Friedland, who was responsible for discovering and
developing several major mining projects including the massive Oyu
Tolgoi gold and copper project in Mongolia, has agreed to commit
$50 million to the consortium, according to one of the two
people.
Hashim Djojohadikusumo, the brother of Indonesian presidential
front-runner and general-turned-businessman Prabowo Subianto, has
also agreed to invest $50 million in the consortium. Mr. Subianto
is running against the Bakrie Group's patriarch, Aburizal Bakrie,
who heads Indonesia's Golkar Party and is also a contender in the
2014 presidential elections. Mr. Djojohadikusumo is worth more than
$700 million, according to the most recent Forbes survey.
Mr. Friedland and a spokesman for Mr. Rothschild declined to
comment on the matter.
Write to Alex MacDonald at alex.macdonald@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires