Boardroom D-Day In London For Indonesian Coal Tycoon Bakrie
Hell hath no fury like a financier scorned. Nat Rothschild's bid to replace the board of Bumi plc, which controls coal mines in Indonesia, reaches a climax Thursday at an EGM in London. Rothschild wants shareholders to overhaul the board and get to the bottom of fraud allegations against its operating units, which are run by the politically powerful Bakrie clan, Rothschild's ally-turned-nemesis. The Bakries, who injected their coal mines into Bumi in 2010 as a way to raise cheaper capital, have a different idea: sell back the assets. Their proposal to the board is for a $640 million restructuring of Bumi plc that would return to shareholders cash and stock in Bumi Resources, a Jakarta-listed firm. The Bakries are reportedly prepared to sell Visi Media Asia, which runs two Indonesian TV channels, in order to raise more capital. This is anathema to Rothschild and investors who feel that they've been sold short by the Bakries. The stock has fallen sharply since 2011 due to faltering coal prices and constant friction between Rothschild and his Indonesian partners.