LONDON, June 26 Indonesia-focused coal miner
Bumi Plc has struck a deal with the former head of its
Berau subsidiary to recover $173 million, most of the cash it
said last month had been lost at the unit.
Bumi was co-founded by financier Nat Rothschild and
Indonesia's influential Bakrie family, but has struggled in the
past two years to overcome bitter boardroom battles, a probe
into financial irregularities and the tumbling price of coal.
Its board now wants to overhaul the company by parting ways
with the Bakrie family and concentrate on 85-percent-owned unit
Berau, as opposed to a more problematic minority stake
in Jakarta-listed Bumi Resources.
A deal to recover the lost cash at Berau is a key step
towards that split and the crucial return to share trading after
a two-month suspension.
Bumi said last month it had completed a review of
irregularities in the accounts of Berau which identified
expenditure of $201 million which had no clear business purpose,
without elaborating. It said it would seek to recover the money.
The company told investors gathered at its annual meeting on
Wednesday that one-time shareholder, former board director and
ex-Berau boss Rosan Roeslani would transfer cash and assets to
the agreed value of $173 million, in exchange for Bumi agreeing
to drop legal claims.
Roeslani has made no admission of wrongdoing or liability in
respect of the claims, Bumi said.
The outstanding $28 million, the company said, related to
cash pre-dating the deal to fold Berau into investment vehicle
Vallar, which became Bumi Plc.
Bumi shareholders will be asked to approve the deal when
they vote on the split with the Bakrie family in coming months.
"There can be no separation without a recovery of the
money," Bumi's outgoing chairman Samin Tan said, adding
negotiations were held back in recent months by the executive
team's focus on the audit of Berau and the need to restart share
trading - suspended after annual results were delayed.
Bumi is now in talks with Britain's financial markets
regulator to allow its shares to resume trade.
Rothschild, whose relationship with his Indonesian partners
soured quickly after Bumi's listing, said on Wednesday that any
cash not returned by Roeslani, a board director until December,
should be reflected in the price of the split with the Bakries.
Britain's regulators and prosecutors, he said, "need to be
all over this situation, bringing those responsible to justice".
Bumi is already working with the Serious Fraud Office.
Bumi's chief executive, Nick von Schirnding, said the terms
of the split with the Bakries - as well as the divorce of the
Bakries from their former partner, outgoing chairman Tan - were
being hammered out and a deal could be announced within weeks.
Tan bailed out the Bakrie family last year and became a
major shareholder in Bumi, through a vehicle jointly owned with
them. Splitting that partnership is critical to separating the
Bakries from the group as a whole.
While the Bakries have agreed to exchange cash and their
shares in London-listed Bumi for the group's minority holding in
Bumi Resources, the length of negotiations has raised questions
over the family's ability to come up with the cash.
Von Schirnding said on Wednesday, however, that Bumi had
received guarantees that the outstanding $228 million was
available. He said "two large financial institutions" were
involved, but did not name them.
A shareholder vote would likely be held after the summer.
Bumi earlier said it was on track to reach its 2013
production target of 23 million tonnes of coal.