March 27, 2012 / 6:44 AM / 8 years ago

UPDATE 2-Bumi seeks to end board rows with change at the top

* Samin Tan takes chairman role, Indra Bakrie becomes co-chairman

* Co-founder Rothschild remains on board as director

* Accounting hit pushes Bumi into pretax loss

* Says considering changes to simplify structure

By Clara Ferreira-Marques

LONDON, March 27 (Reuters) - Indonesian coal miner Bumi Plc sought to draw a line under damaging discord between its leading shareholders on Tuesday, announcing a long-awaited board shake-up that brings in a new chairman and leaves a role for co-founder Nat Rothschild.

London-listed Bumi, one of the world’s largest thermal coal exporters, announced the changes alongside the first full-year results since the company made its market debut in June last year.

In line with announcements made last month, coal entrepreneur Samin Tan, who became a major investor alongside the Bakrie family lasUKt year, has become chairman.

Indra Bakrie, the previous chairman, has stepped down to the role of co-chairman. Tan and the Bakrie family together own 29.9 percent of voting rights in Bumi Plc, after Tan helped the politically-connected Bakries pull back from the brink of a debt crisis last year.

Rothschild, who was co-chairman until Monday’s shake-up, will stay on the board, in a sign of rapprochement with the Indonesian partners who sought to oust him just last month.

“In my opening statement in the meeting yesterday, after I was installed as chairman, (I said that) like it or not, we knew there were politics previously - so I urged and called for everyone to put that (aside),” Tan told reporters.

“From now let’s just look ahead, work ahead and move ahead... I hope that from now on you won’t see any more arguments, especially in the public domain.”

Bumi shares are currently trading around 700 pence, almost 40 percent below the level at which the group listed last year and some 35 percent below the level at which Tan bought into the company last year. At around 0900 GMT on Tuesday, the shares were up just over 1.7 percent at 708 pence.

In other changes, Bakrie veteran Nalin Rathod, who was instrumental in the acquisition of what are now some of Bumi’s key assets, will become the London-based chief executive of Bumi Plc, replacing Ari Hudaya. Scott Merrillees will become CFO.


Tuesday’s changes come after months of high-profile disagreements between Rothschild and his Indonesian partners that fuelled a debate on governance across the mining sector, where many significant UK-listed players are foreign-owned.

Tense relations between Rothschild and the Bakrie camp reached a low point in November after a letter from Rothschild demanding a “radical cleaning up” was leaked. In February, the Bakries and Tan surprised the market — and Bumi Plc — by calling for a shareholder meeting to bring in Tan as chairman and make other changes, not least ousting Rothschild and other key directors from the board.

A visit by two independent directors to Jakarta, however, helped take the heat out of the dispute and the top Indonesian investors last month withdrew their request for a shareholder vote to bring in Tan and others, opting to sidestep a public showdown and pursue their aims in the boardroom instead.

Bumi said on Tuesday that beyond governance the group was also looking to resolve two other issues dragging on its shares — the debt burden of its subsidiaries and its complex structure, as part of which Bumi holds 85 percent of PT Berau and just under a third of PT Bumi, which in turn owns the group’s key coal assets and base metals miner Bumi Resources Minerals

It is considering options including a potential merger of Berau and Bumi to create an umbrella operating company.

“We don’t know the precise facts, the legal and tax implications - give us some time,” Tan said, declining to give detail. “The commitment we have from all parties involved is to simplify the structure... to make it leaner and bring everybody closer to the operating assets.”

Bumi posted a maiden operating profit of $280 million, on underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $427 million, broadly in line with market expectations, boosted by a 32 percent rise in prices.

It reported a pretax loss of $115 million, hit by $286 million of one-off accounting writedowns related to share price changes at the time the deal to create Bumi completed.

The miner said it expected 2012 price to remain “robust” and said it was on track to deliver 23 million tonnes of production from PT Berau and 75 million tonnes for PT Bumi in 2012.

PT Berau and PT Bumi posted production of 85 million tonnes for last year, up 9 percent.

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