Indonesia-focused miner Bumi moved closer to divorcing the Bakrie family that co-founded it, announcing the departure of its Bakrie-supported chief executive and plans to sell its stake in unit Bumi Resources soon.
But, in a statement issued after a Wednesday board meeting, the board indicated it would resist Bakrie plans to unwind the entire venture, saying it had no intention of recommending the sale of its second key asset - a majority stake in Berau Coal - under the terms of a split proposed by the family in October.
Bumi, one of the world's largest thermal coal exporters, was set up two years ago by financier Nat Rothschild and
Bumi now looks unlikely to continue in its current form as Rothschild and the Bakries jostle over the company's future structure. Either of their plans would end an era for a miner that has become emblematic of investors' worries about governance of foreign resources firms listed in London.
Since its listing in June last year, Bumi shares have fallen by some 75 percent, hit by weak coal prices, shareholder battles and an investigation into alleged wrongdoing at its Indonesian assets. The shares closed down 4.8 percent on Wednesday.
"The board will not be in a position finally to recommend a course of action until regulatory processes are sufficiently advanced, but is working towards a transaction which separates the Bakrie Group from the company and divests the company's minority interest in Bumi Resources as soon as practical," the group said in the statement.
Bumi said the board had examined on Wednesday a "near final version" of the long-awaited lawyers' report into the potential irregularities. The board, it said, did not see from that report the need for material writedowns to the assets in focus, largely early stage exploration projects.
However, the board will separately take a hit on the value of Berau, a "significant" accounting adjustment, due to falling coal prices and the
Bumi also confirmed Bakrie statements in recent weeks that the information that triggered the probe was obtained by the illegal hacking of email, which could affect the group's ability to use the findings.
Plan A, Plan B
Relations between the Bakries and Rothschild soured not long after the listing, with the two sides trading blows for months.
The conflict came to a head in September, with news of the allegations of wrongdoing and a probe into operations including Bumi Resources, the jewel in the Bakrie crown.
Three weeks after that, the Bakries announced their plan to draw the line under their London venture and unwind Bumi, reacquiring the operating assets they had brought in.
Rothschild then tabled plans to counter that proposal. Under his proposal, new investors would inject cash and all current key Indonesian investors would be bought out, including founding shareholder Rosan Roeslani and Bakrie partner Samin Tan.
According to Wednesday's statement from the group, neither is willing to sell on the terms proposed.
Rothschild's proposal, detailed publicly for the first time by Bumi on Wednesday, would have new investors injecting cash into Bumi via a share issue amounting to 25 percent of current share capital.
The Bakries would swap their 23.8 percent stake in Bumi for part of the minority share in Bumi Resources, buying out the remainder of that asset with $278 million in cash. They would then be out of London-listed Bumi, taking the asset.
Roeslani's Bukit Mutiara and Tan's Borneo would then sell their stakes, totalling more than a third, at the price paid by new investors for the new shares. Bumi would cut Roeslani out completely by also buying his 4 percent in Berau Coal.
Rothschild said this week he had the support of 11 new and existing investors, including five of the largest institutional shareholders in Bumi, which with his own shares amount to 28 percent of voting rights - potentially a blocking minority.
But the Bakries slammed his plan on Wednesday as "not workable" after the Indonesian shareholders told Bumi they would not back it, leaving only the family's exit proposal.
Rothschild said in response to the Bumi statement that he was "disappointed" the board had not backed his plan. He said Wednesday's decisions were evidence the major Indonesian shareholders exerted influence over the board "that is not in the best interests of minority shareholders".
Bumi's chief executive, Bakrie veteran Nalin Rathod, will step down at the end of the year, and will be succeeded by former Anglo American executive Nick von Schirnding, now head of corporate affairs.