T

he Indonesian shareholders of Bumi Plc., seeking to remove co-chairman Nat Rothschild, are confident they can shake up the miner’s board before creating the world’s biggest coal firm, major investor Samin Tan said on Tuesday.

Tan and Indonesia’s Bakrie Group, who together own 29.9 percent voting rights in Bumi Plc., said last Friday they were seeking to oust financier Rothschild and other key directors from the board of the London-listed coal miner. They require more than 50 percent approval from shareholders.

“We are very confident, otherwise we wouldn’t have done what we have done, because we believe we have the vision to help beautify the asset,” Tan told Reuters in an interview, adding he had already talked to some institutional shareholders.

The attempt by Tan and the Bakries to cut out Rothschild from the board of a firm he helped set up may worry investors already concerned about governance at Bumi, owner of some of the richest mines in Indonesia, the world’s biggest exporter of thermal coal.

Bumi is the most closely watched firm in Indonesia and instability at its network of companies is seen as a symbol of the continued risks of investing in the G-20 economy, which recently won a return to investment grade status.

But Tan said he would cut Bumi’s debt and create shareholder value.

“We just want to achieve a board that is cohesive, collaborative,” Tan said, adding that he had seen media reports of discord between Rothschild and the Bakrie Group. He said he hoped Rothschild would remain a shareholder.

Tan said he would be willing to meet with Rothschild in London and added that the proposed changes were not designed to target any individual.

“There’s an idea we are trying to change the whole cabinet. We are not,” he said, adding that six out of eight independent directors would remain in place.

Tan in November paid $1 billion to enable his coking coal firm PT Borneo Lumbung Energi & Metal to get a 23.8 percent stake in Bumi Plc. He said the move to change the Bumi Plc. board was mutually agreed with the Bakrie family during that deal.

Rothschild owns just under 12 percent of Bumi Plc.

Shares in Bumi Plc. fell further after Tan’s comments and closed 3.33 percent lower on Tuesday. On Wednesday, shares in its Indonesian unit Bumi Resources fell 2 percent in a firmer Indonesian market.

If the changes sought by the Bakries and Tan are approved by shareholders at a general meeting to be held by March, Tan would become Bumi’s chairman and the Bakrie Group’s Indra Bakrie would become co-chairman.

Bumi’s CEO Ari Hudaya, a long-time Bakrie lieutenant, would be replaced by another Bakrie mining executive, Nalinkant Amratlal Rathod.

Indonesian investment firm Recapital Advisors via its unit Bukit Mutiara has 13 percent voting rights in Bumi Plc. The Bakries’ Indonesian listed miner Bumi Resources, now a unit of Bumi Plc, has lent money to both Recapital and Bukit Mutiara.

If Recapital sides with the Bakries and Tan at the general meeting, they would have 43 percent of the votes. Other shareholders in Bumi include BlackRock Advisors and the Abu Dhabi Investment Council.

Tan said he was heading to London next week to meet shareholders and Bumi’s directors.

Last year’s move by Tan to invest in Bumi Plc., which helped the politically connected Bakrie Group pay off the bulk of a $1.35 billion loan, marked the second time in three years that the Bakries have scrambled to complete a deal to ease debts.

Rothschild, the future Baron Rothschild of a European banking dynasty, put his reputation on the line by enabling a joint London listing of the Bumi group.

If Tan becomes Bumi Plc. chairman, he said he would use his experience of developing Borneo Lumbung’s greenfield mine to push for faster execution of Bumi projects, such as the Bakries’ Bumi Minerals Resources plan to start zinc production from north Sumatra, which he said should come by 2014.

He also would like to see a merger between Indonesian coal miners Bumi Resources and Berau Coal Energy, possibly via a share swap, in a deal that could be worth $7.5 billion based on Reuters calculations.

Tan said the aim was to more than double their current combined annual output of 85 million tons to 185 million tons a year by 2016, which would dwarf other coal producers such as BHP Billiton.

Bumi Plc. owns 29 percent of Bumi Resources and 85 percent of Berau. Tan envisages these two firms forming a coal unit, with the Bumi Minerals Resources, considered by some analysts as holding their most promising assets, as another non-coal unit.

“I think to combine Berau into Bumi Resources, I think it’s a good thing to do,” said Tan. “If everything goes well, we could probably see it quite imminently.”