UPDATE 2-Bumi urges rejection of Rothschild plan
* Board unanimous in rejecting Rothschild's proposal
* Wants to push ahead on exit from Bakrie Group, Bumi Resources
* Appoints Eko Budianto as president director of Berau
* Shares down 3.3 pct
LONDON, Jan 29 (Reuters) - Bumi Plc, the London-based Indonesian coal mining group riven by shareholder disputes, urged investors on Tuesday to reject British financier Nat Rothschild's proposals to overhaul the board and back its own plan for peace instead.
Rothschild, who is locked in a bitter corporate governance battle with Bumi Plc's co-founders, Indonesia's influential Bakrie family, wants to remove 12 of the 14 current directors and bring in a new board including himself.
Bumi has set Feb. 21 as the date for a meeting of shareholders to vote on 11.1 percent shareholder Rothschild's proposals.
Underlining its opposition to the proposals, the board also announced on Tuesday the appointment of Eko Budianto to head Bumi Plc's 85 percent-owned business Berau Coal Energy , an appointment opposed by Rothschild.
Newly appointed Chief Executive Nick von Schirnding said the Bumi Plc board was unanimously of the view that Rothschild's plan would lead to stalemate, continued shareholder disputes and further value destruction.
Instead the board wants to pursue a recovery plan starting with a divorce from the Bakrie Group under a "separation proposal" which would see Bakrie selling its 23.8 percent stake in Bumi Plc in return for $278 million in cash and Bumi Plc's 29 percent stake in PT Bumi Resources.
This would leave Bumi Plc to focus on its majority-controlled Indonesian business, Berau Coal.
Von Schirnding said the separation proposal was currently worth more than $580 million, including the $278 million in cash.
"That value is trickling away over time," he told reporters on Tuesday.
"The longer we prolong the in-fighting the less value will remain for other shareholders."
Shares in Bumi were trading 3.3 percent lower at 330 pence by 1210 GMT.
Analysts at Nomura said the proposals were a positive step from Bumi management and the showed they were taking the task of cleaning up the group seriously, but uncertainty remained.
"(They) are attempting to offer an alternative to Rothschild's shareholder activism but the board will need to make it through the EGM (extraordinary general meeting) for them to be able to deliver on their vision," they said.
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 a plunging share price - not helped by falling coal prices -, an investigation into allegations of financial wrongdoing and investor battles.
The Bakries said last year they planned to unwind their interests in the company, drawing a line under their London adventure and taking back the assets they and partners such as former Berau Coal head and Bumi Plc investor Rosan Roeslani brought to Bumi Plc.
Von Schirnding said that if Rothschild's resolutions were passed the Bakries would block a deal to separate the Bakrie Group and Bumi Resources, and they could enforce their right to appoint the chairman, chief executive and finance director of the company.
The resulting legal dispute could take months, if not years, to resolve, he said, destroying further value for shareholders.
"My intention here is very clear: I want to move this company out of the mess it is today," he said.
He confirmed that Budianto would replace Roeslani at the helm of Berau, and Tony Redman, former technical director at Anglo American, had been appointed as consultant technical adviser.
The group also said that the two directors who Rothschild has proposed should stay on the board, Steven Shapiro and Graham Hearne, do not support his proposals and will resign if the proposals are passed by shareholders next month.
A spokesman for Rothschild declined to comment.