Troubled Miner Bumi to Revamp Name: Board Source
Indonesia-focused miner Bumi Plc will announce plans for a smaller board and a new company name as it seeks to break with two years of damaging battles between investors, a source familiar with the matter said on Sunday.
Bumi's board will make the announcements in documents to be sent out to shareholders this week and will also, as early as Monday, separately announce a new head for its key, majority-owned Indonesian asset, Berau Coal, the source said.
Bumi's co-founders, financier Nat Rothschild and Indonesia's influential Bakrie family, are locked in a bitter battle over plans for the future of a coal miner, which has become emblematic of minority investor troubles with foreign resource firms listed in London.
Retaining and tightly managing Berau Coal, in which Bumi owns 85 percent, is critical to the plans of the current board, under newly appointed Chief Executive Nick von Schirnding, to rebuild the company without the founding Bakrie family. Bumi Plc owns only 29 percent of its other main operating asset, Bumi Resources.
The source said Eko Budianto, operations director at Berau, would take the helm there, replacing Indonesian investor and Bumi shareholder Rosan Roeslani.
Former Anglo American Coal boss Tony Redman will be an adviser to the group, the source said.
(Read More: Falling Coal Prices Threat to Indonesia Rupiah)
"It is about (the current management) asserting control," the source said, adding the smaller board will reflect the exit of the Bakrie family. The new name is still being finalized.
Roeslani, a major shareholder in Bumi, resigned from Bumi's board last month after UK regulators ruled he had acted "in concert" with the Bakries. The regulators restricted their voting rights and ordered them to sell down their holding.
The Bakries and Rothschild got together in 2010 to bring promising Indonesian assets to London, but the relationship quickly soured. The venture has instead been marked by crumbling shares - not helped by falling coal prices - an investigation into financial wrongdoing and investor battles.
The Bakries said last year they planned to unwind the company, drawing a line under their London venture and taking back the assets they and partners such as Roeslani brought in.
All sides agree the Bakries should exit, swapping their shares in Bumi Plc for the minority stake in Bumi Resources, over which the London-listed firm has struggled to exert control. But that is where agreement largely ends, with both Rothschild and the current board resisting efforts to allow the Bakries to buy back Berau.
Rothschild, mounting his own effort to resurrect the company, has lambasted the current board and last month called for a meeting to vote on a resolution which could oust 12 of 14 current board members and bring in a new board which includes himself, in order to turn the venture around. The shareholder meeting is expected in late February.
(Read More: Bumi Says Indonesia Probe Fails to Prove Misconduct)
The Bakries have threatened to refuse to exit if Rothschild returns, and the current board has also resisted, saying it is taking its own action to improve governance and turn the group around.
In a statement on Friday, the current board rejected suggestions it would liquidate the company and said its intention remained to regroup around Berau.
It plans to use the operation as a base to build a new coal group, which would eventually expand outside Indonesia.