Following the powerful Bakrie family’s apparently planned split from Bumi, a London-listed company coal miners from Indonesia – shares in the Bumi company have positively soared. The unease has been created due to apparent irregularities at one of the Bakrie family’s firms, one of many assets of the family’s where Bumi hold a stake.
The Bakrie family had, according to the Bumi group, requested that their 24% stake be cancelled and exchanged for PT Bumi Resources shares of the same value. This translates to 10.3% of the share capacity outstanding.
The Bumi firm said that they were considering the request and would make a ‘recommendation’ to shareholders, and that they would also be reflect on the prospect of buying back the remaining 18.9% stake still held in Bumi.
The deal would bring to and an end a high-profile association between the two. The main unrest which has caused the disruption has come between the Bakrie family and one of the co-founders of the Bumi group, Nathaniel Rothschild.
The relationship became particularly fractured – more so than normal – last year when the Bumi man expressed the need for a major fix-up at PT Bumi Resources, one of the Bakrie family’s many firms, where Bumi hold a stake of 29%. Last month, Rothschild and his group announced that a probe into ‘irregularities’ at the firm, only some of which were financial in nature, had begun with immediate effect.
The unrest has caused stock value in the firm to fall by over two-thirds over the last year, due to the created in investors by the failing relationship. The situation is a very awkward one for the Bakrie family, but the separation could come at as good a time as any for the Bumi group. The latter can walk away with reputation intact and some money in the bank.