Bumi Plc, the London-listed Indonesian coal mining group riven by a shareholder dispute urged investors on Tuesday to reject British financier Nat Rothschild’s proposal to replace the board and back its own plan for peace instead.
Rothschild is locked in a bitter corporate governance battle with Bumi Plc’s co-founders, Indonesia’s influential Bakrie family, wants to remove at least 12 of the 14 current directors and bring in a new board including himself.
Shareholders are due to vote on Rothschild’s proposals at a special meeting in London on February 21.
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.
Chief Executive Nick von Schirnding said the Bumi Plc board was unanimous in its view that Rothschild’s plan would lead to a 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 direct 23.8 per cent stake in Bumi Plc in return for $278m in cash and Bumi Plc’s 29 per cent stake in PT Bumi Resources.