Bumi board rejects Rothschild's radical plan for shake-up

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The Independent Online

The soap opera at Bumi continues after the board of the London-listed Indonesian coal mining group voted unanimously to reject a radical restructuring plan proposed by its co-founder, Nat Rothschild.

But Mr Rothschild's campaign did receive a high-profile boost when Peter Simon, the founder of the Monsoon and Accessorize fashion chain, declared his support for the proposal.

"It is time for a complete change of management," said Mr Simon, whose Stoneycroft family trust owns 0.35 per cent of Bumi's shares.

Mr Rothschild, who is locked in a bitter dispute with Bumi's other co-founders, Indonesia's Bakrie brothers, as well as senior executives has proposed replacing 12 of the group's 14 directors and rejoining the board, after quitting last year.

Bumi set 21 February as the date for the shareholders to vote on Mr Rothschild's proposals and urged them to reject his plan, which they warned would lead to "stalemate, continued shareholder disputes and further value destruction".

Underlining its opposition to the proposals, the board also announced the appointment of Eko Budianto to head Bumi's 85 per cent-owned Berau Coal Energy subsidiary, an appointment opposed by Mr Rothschild.

Instead, Bumi proposed a recovery plan starting with a divorce from the Bakrie brothers in a deal that would see them selling their 23.8 per stake in Bumi in return for $278m in cash and Bumi's 29 per cent stake in the Indonesian group Bumi Resources, its other main business. This would leave Bumi to focus on the Berau assets.

The board warned the deal would be scuppered if Mr Rothschild succeeded in retaking control of the company, created in November 2011 when the Bakries reversed some of their Indonesian coal-mining assets into the banking scion's London-listed cash shell.

This is because the Bakries have threatened to derail their exit deal if they have to work with Mr Rothschild. The Bakries welcomed Bumi's rejection while Mr Rothschild said the proposed deal with the Bakries "patently fails" to achieve the "clean-up and resultant re-rating of Bumi".