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Bakries take back Bumi Resources in $501m deal
The politically wired Bakrie family has finally secured approval from the shareholders of Bumi Plc to take back the countryâs biggest coal miner â Bumi Resources â from the London-listed company
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he politically wired Bakrie family has finally secured approval from the shareholders of Bumi Plc to take back the country's biggest coal miner ' Bumi Resources ' from the London-listed company.
The shareholders of Bumi plc, which currently own a 29.2 percent stake in Bumi Resources, approved on Tuesday the Bakrie family's proposal to purchase shares in the coal miner in a proposed deal worth US$501 million.
The proposal was approved after Bumi plc struck a 'peace' deal with its co-founder Nathaniel Rothschild, a British financier and friend-turned-rival of the Bakries.
'Bringing all parties together and creating a transaction that shareholders can unite behind has been a long and difficult process,' Bumi plc chief executive officer Nick von Schirnding said in a statement.
'Today's vote allows us to focus on creating additional value for our shareholders through concentrating our efforts on Berau.'
PT Berau Coal Energy is another Bumi plc asset, in which it holds a 84.7 percent stake.
The Bakries had been waiting for a decision on Tuesday and first tabled the separation proposal last year following a bitter dispute with Rothschild over alleged financial irregularities in Bumi Resources and Berau.
Under the separation agreement, the Bakrie Group, which holds a 23.8 percent stake in Bumi plc, will sell its stake to Bumi plc chairman Samin Tan for $223 million.
The purchase will raise Samin's stake in the London-listed firm to 47.6 percent. The Bakries will then use the money to partly repurchase Bumi plc's entire 29.2 percent stake in Bumi Resources, worth about $501 million.
The Bakrie Group has already put $50 million in an escrow account as a commitment that it will continue the plan to takeover Bumi Resources, which holds majority stakes in two significant coal producers ' PT Kaltim Prima Coal and PT Arutmin Indonesia.
Von Schirnding said he had no evidence on whether the Bakrie Group ' part of a business empire owning valuable assets in industries such as coal to manufacturing, but which has also struggled to reduce its debts ' already had the remaining $228 million to complete the transaction.
'We've asked several times for proof of funding but that hasn't been forthcoming,' Von Schirnding said as quoted by Reuters.
Bakrie Group senior vice president Christopher Fong said it did not want to lose the $50 million as a break fee of any unsuccessful transaction.
'Our financial arrangement remains confidential and will be defined by the agreement signed with Bumi plc. We saw yesterday's extraordinary general meeting vote in London as positive and expect the separation to be completed within the agreed time frame,' Fong said.
Following the approval, Bumi plc, which during the extraordinary meeting also received approval to change its name to Asia Resource Minerals plc and trade under the new code 'ARMS', is targeting to complete the transaction of the Bakrie Group's exit in late January next year.
The company is planning to return as much as $400 million from the sale of Bumi Resources' stake to shareholders.
The company will also perform several overhauls, including the appointment of a new independent chairman and making changes to its board.
