P

T Bumi Resources and subsidiary PT Bumi Resources Minerals (BRMS) say that the firms want to divest more assets to reduce debts and finance expansion, as the conflict between shareholders of London-based Bumi Plc escalates.

Bumi Resources president director Ari Saptari Hudaya said on Thursday that the firm was in talks with two investors interested in purchasing its stake in PT Fajar Bumi Sakti, which is also engaged in coal mining.

Ari said that the firm hoped to see a deal “in the first quarter of next year,” declining to give further
details.

Dileep Srivastava, the corporate secretary of Bumi Resources, which holds a 50 percent stake in Fajar Bumi Sakti, said recently that his firm would monetize additional assets, including part of its stake in BRMS and its 84.55 percent stake in PT Pendopo Energi Batubara, to repay debts.

Separately, a representative of BRMS said on Thursday that the firm was seeking new partners to accelerate development of zinc and lead mining subsidiary PT Dairi Prima Mineral and copper and gold mining subsidiaries PT Citra Palu Minerals and PT Gorontalo Minerals.

All three subsidiaries are in exploration stages.

“We are exploring finding strategic partners to accelerate their reserves into production. However, we will maintain majority ownership, above 60 percent,” BRMS’s vice president for investor relations, Herwin Hidayat, said.

BRMS currently holds a 96.97 percent stake in Citra Palu and 80 percent stakes in Dairi Prima and Gorontalo.

Herwin said that BRMS might seek project financing to develop the subsidiaries. “Those two alternatives are the best for us, because they will incur no [loan] burden for the company [BRMS]. We want to maintain a clean balance sheet.

BRMS, which currently has a “healthy” debt-to-equity ratio of 20 percent according to Herwin, is 87 percent owned by Bumi Resources, while the remainder of its shares are publicly held.

Meanwhile, Bumi Resources is 29.2 percent owned by London-listed Bumi Plc, which has sought to divest its stake in Bumi Resources after one of its shareholders, the Bakrie Group, proposed acquiring Bumi Resources in a share-swap and cash transaction of US$278 million.

The proposal followed a prolonged dispute between the founder of Bumi Plc, British financier Nathaniel Rothschild, and the Bakrie Group, which comprises PT Bakrie & Brothers and Long Haul Holdings Limited.

The Bakrie Grouzp holds a 23.8 percent indirect stake in Bumi Plc.

Rothschild’s Vallar Plc, the previous name of Bumi Plc, entered into an agreement with the Bakrie Group and PT Bukit Mutiara — the previous majority shareholder of major Indonesian coal miner PT Berau Coal Energy, to develop Bumi Plc in 2010.

Berau is currently 84.7 percent owned by Bumi Plc.

The relationships between Bumi Plc and the Bakrie Group began to sour last year, after management and financial issues affecting Bumi Plc’s subsidiaries led the Bakrie Group’s to propose exiting its London venture and taking back Bumi Resources.

Rothschild submitted a counter-proposal, which was regarded as “undeliverable” by the board of Bumi Plc.

The United Kingdom’s Panel on Takovers and Mergers announced late on Wednesday it had found that Bukit Mutiara was affiliated with the Bakrie Group, which led Bukit Mutiara to be stripped of its voting rights.

The decision was greeted warmly by Bumi Plc.

“Following the panel’s ruling, we are pleased that we are now able to focus on a clear way forward out of the current unsatisfactory situation and progress the separation from the Bakrie Group and Bumi Resources, which will result in an operating group focused on Berau and with significant cash resources,” Nick von Schirnding, Bumi Plc’s group head of corporate affairs and investor relations, said.