End in sight for Borneo, Bakrie partnership

JAKARTA. Hard coking coal miner PT Borneo Lumbung Energi & Metal is clinging to the hope that it could recover its investment in London-listed Bumi plc from its partner Bakrie Group, but is considering a shares payment alternative.

Borneo and the Bakrie Group are working on the dissolution of special purpose vehicle company. The dissolution is a consequence of the Bakrie Group’s plan to abandon its ownership in Bumi plc.

Borneo president director Alexander Ramlie says his company expects to complete the separation with the group as early as next week.

“We are in talks about whether we will get a full recovery in cash and/or be paid with shares in Bumi plc, which is still a possibility. I cannot say for sure because the talks are ongoing,” he said on the sidelines of Bumi’s general meeting here on Friday.

Borneo is seeking compensation after it borrowed US$1 billion from Standard Chartered Bank to purchase the London-based firm’s stake from the Bakrie Group’s Bakrie & Brothers in late 2011 to enter Bumi plc. The Bakrie Group sold its stake in Bumi plc to Borneo because of mounting debts it was facing.

Shortly after the deal was closed, Borneo found its investment plummeting as Bumi plc’s shares tumbled on the back of an internal dispute between shareholders.

Borneo and the Bakrie Group started negotiations to unwind their joint venture agreement late last year, when the latter tabled a proposal to buy BUMI back. Under the proposal, the Bakrie Group initially aimed to perform the buyback before last year’s Christmas.

The execution of the proposal was scheduled for May 30, which was then extended — after a failed counter proposal tabled by one of Bumi plc co-founders and shareholders, Nathaniel Rothschild —until an annual general meeting on Wednesday.

After the general meeting, Bumi plc chief executive officer Nick von Schirnding said the company’s board remains committed to the delivery of a separation from the Bakrie Group and Bumi Resources.

Borneo’s Alexander, who is also a non-executive director at Bumi plc, said the announcement of the separation of the Bakrie Group from Bumi plc would be made next week.

Bumi plc currently holds 29.2 percent stake in Indonesia’s biggest coal miner Bumi Resources and 84.7 percent stake in another major coal player PT Berau Coal Energy.

In a shareholders’ meeting on Friday, Bumi Resources announced new names to fulfill 10 vacant director and commissioner positions. The positions were previously held by Bumi plc company representives.

Bumi Resources installed Kusumo A. Marto as president commissioner to replace Samin Tan, who is current chairman of Bumi plc. Other new names on the board of commissioners are Zuri Pare and Anton Setianto. Bumi Resources also welcomed two new directors, namely Eddie J. Soebari and RA Sri Darmayanti.

Shares in Bumi Resources, traded in Jakarta under BUMI, were closed at Rp 550 apiece on Friday, increasing by 3.77 percent compared to a day earlier. Meanwhile, shares in Borneo, traded in Jakarta under BORN, ended at Rp 385 apiece on Friday, a 6.94 percent jump compared to the previous day’s closing. Bumi plc is under stock trading suspension in London. (Raras Cahyafitri)