LONDON Shareholders in Indonesia-focused coal miner Bumi Plc BUMIP.L have backed a planned split with the influential Bakrie family that co-founded the company, an important step towards a long-awaited overhaul of the group.
The divorce plan was widely expected to be approved at a shareholder meeting on Tuesday, after co-founder and major investor Nat Rothschild struck a last-minute peace deal with management last week and lent his support.
Bumi was founded in 2010 by the Bakries and Rothschild, with the aim of bringing promising Indonesian coal assets to London investors. But their relationship quickly soured.
Investors hope the split will revive a business battered by boardroom rows, allegations of wrongdoing and weak coal prices. Its focus will now be on Asian growth markets.
The Bakrie family will sell its stake in Bumi Plc to outgoing chairman and one-time partner Samin Tan - who in turn becomes the single largest shareholder, with a 47.6 percent stake.
The Bakries will use income from that sale and additional cash to then buy back a 29 percent stake in debt-laden Indonesian miner PT Bumi Resources (BUMI.JK), shares which are currently held by Bumi Plc.
The Bakrie exit and Bumi Resources sale will allow London-listed Bumi Plc - renamed Asia Resource Minerals - to focus its turnaround efforts on its other main Indonesian subsidiary, Berau coal (BRAU.JK), in which it owns an 85 percent stake.
If the split completes successfully, Bumi plans to hand back at least $400 million to shareholders.
More than 91 percent of shareholders voting on Tuesday supported a key resolution on the sale of Bumi Resources, and more than 85 percent backed all other related resolutions. Over 99.9 percent supported the name change.
But for the planned split to complete on time in late January in its current form, the Bakrie family - asset-rich but frequently cash-poor - must be able to finance the cash portion of the deal.
Without that $228 million, the separation goes back to the drawing board, as all elements are inter-dependent.
"There are 'plan B' (options) that we are working on, but this is the preferred plan," Bumi Chief Executive Nick von Schirnding said on the sidelines of Tuesday's meeting.
"(The Bakries) have said they have the money. We have asked a number of times for proof of funding, but that hasn't been forthcoming."
A Bakrie family spokesman said the group did not foresee any delays.
"We welcome this show of support from shareholders and look forward to completing the transaction as per the agreed terms."
As part of the planned overhaul, the company will also revamp its board and has said it will bring in a new, independent chairman. Von Schirnding said the company had a shortlist of three to four candidates for chairman and expected to make an announcement "soon".
Bumi is also seeking to recover cash, including $173 million from former executive Rosan Roeslani, who has recently invested in Italian football club Inter Milan.
Arbitration proceedings have begun, and will need to complete before Bumi can consider using Roeslani's assets, for example coal equipment, to cover the debt - assuming Roeslani does not meet a final payment deadline of December 26th.
Bumi had intended to secure that compensation before pushing ahead with the split, but now says it is unwilling to hold up the separation for "an extended set of legal procedures".
(Additional reporting by Silvia Antonioli; Editing by Erica Billingham)