Bakrie Group Seeks an Exit From London-Listed Bumi

   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 [e-mail]

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