The Bakrie family business empire
Markets: After minutes from the US Federal Reserve suggested a scaling back of its stimulus programme was likely in the “coming months”, most Asian indices fell back, although Japanese stocks rose to a six-month high. (Financial Times)
Obama to halt attack if Syria destroys chemical weapons || Glencore Xstrata lifts cost-cutting target to $2bn || UK chancellor Osborne claims austerity victory || Twitter makes its largest acquisition to date || Deutsche Bank in Tokyo anti-bribery probe || Verizon to sell a combination of fixed and floating-rate debt || Mining group Bumi’s split from Indonesia’s Bakrie family delayed again || Interdealer broker ICAP closes in on settlement over Libor claims || Foreign firms turn to FX swaps to fund Chinese operations || Nine of Europe’s biggest utilities joined forces in warning to EU || Hybrid cars boost Toyota || Koch Industries to buy Molex || Markets
Markets: Asian stocks rose, extending the longest rally in the benchmark equity gauge this year, and the Thai baht and Malaysian ringgit climbed before Chinese factory output and retail sales data expected to show growth in August. Crude oil slipped for a second day and credit risk fell. (Bloomberg) (Financial Times)
China’s June trade data pointed to a deeper slowdown || Saudi Arabia and UAE prop up Egypt regime with offer of $8bn || Brussels sets up clash with Berlin over banks || Bakries offer to sell Bumi stake || J.P. Morgan review finds errors in debt-collection lawsuits || Rupert Murdoch has been summoned to reappear before the culture, media and sport select committee || The BoJ is unlikely to ease further this year || German and French companies to benefit from lower borrowing costs || The US government has officially designated AIG and GE Capital as “systemically important” || Markets wrap || FTAV’s latest
EU secures deal to cap bankers’ bonuses || Iberia charge pushes IAG to €997m loss || RBS seeks more time for branch disposals || Apple shareholders in protest vote on pay || Shell puts Arctic ambitions on ice || JC Penney loses one-third of its sales || Markets: Bulls back in charge
We assume that the Bumi survivalists, led by Sir Julian Horn-Smith, never really expected Nat Rothschild to just retire from the scene after suffering defeat in the boardroom power struggle. And so it has proved. Rothschild is still a subscriber to the Jakata Post and he’s noticed a curious item — the allegedly late disclosure of the sale of a stake in a subsidiary to what is reportedly a Bakrie family entity.
Updated with some context: Bumi, the London-listed Indonesia-focused coal miner set up in 2010 by Nat Rothschild when he convinced Indonesia’s influential Bakrie family to reverse their coal assets into his cash shell Vallar, has been, well, rollicked as the share price plunged because of sliding coal prices, concerns about Bumi’s corporate governance, high debt levels and the out-break of investor warfare. Shocking. And Bumi is under particular stress right now because of allegations of financial irregularities at two of its subsidiaries. The release below concerns the long awaited report into that mire by law-firm Macfarlanes. Well, we don’t actually get the report itself, but we do get some details…
Asian shares higher || Progress made on EU budget deadlock || Argentina responds angrily to NY bond ruling || Anglo American shareholders want asset sales, cost cuts || Rothschild raises $270m for Bumi proposal || Dalman to take on executive duties at ENRC || Banks tout idea of sharing bond data || Olam says it can withstand ‘stress’ || Why milk costs €1.50 a litre in Greece
BoE culture criticised in reports || PPI provision pushes RBS to £1.26bn loss and faces Libor fines || Sandy’s devastation widens || Rothschild to counter Bakrie buyout, say sources || US unemployment expected at 7.9 per cent || Van Rompuy to press on with budget talks || Sharp junked || The Fed should continue QE3 until unemployment falls below 7.25 per cent || Israel to derail $15bn PotashCorp move
Asian shares higher || BoE culture criticised in independent reports || StanChart, BBVA named Gsifis || Rothschild ‘to counter Bakrie buyout’ || Sandy’s devastation || Chesapeake books loss on writedowns || Time for helicopter money? || How financial crises really spread
From the FT: The board of Bumi Plc is weighing up severing ties with one of its Indonesian businesses as part of a restructuring aimed at reviving investor confidence in the controversy-hit London-listed coal miner…
The Indonesian investors in coal miner Bumi have said UK financier Nat Rothschild can stay on the company’s board, but only if he steps down as co-chairman and stops being a “disruptive influence” over his calls for a shake-up at PT Bumi Resources, a Bumi affiliate, reports the FT. The investors, the Bakrie family and their partner Samin Tan, announced on Tuesday that they had withdrawn their demand for an extraordinary general meeting to remove Mr Rothschild and other directors from the Bumi board. They say they will now pursue their proposed changes at a board meeting scheduled for March 26.
The Indonesian shareholders in coal miner Bumi are open to a compromise that would see financier Nat Rothschild stand down as co-chairman of the company but remain on its board, the FT says, citing people familiar with the matter. Publicly, however, the shareholders – the businessman Samin Tan and the Bakrie family – are insisting on pushing through their proposal to drop Mr Rothschild and will launch a charm offensive next week to persuade others to back them. Chris Fong, a spokesman for the Bakrie family, justified the move against Mr Rothschild by describing him as the “financial engineer” who listed Bumi in London but was no longer needed as co-chairman. “We value him for bringing us to London, introducing us to the market, but we realise we need to be here and we can’t leave that to Nat,” Mr Fong said in an interview.
The Indonesian shareholders in coal miner Bumi are open to a compromise that would see financier Nat Rothschild stand down as co-chairman of the company but remain on its board, according to people familiar with the matter. Publicly, however, the shareholders – the businessman Samin Tan and the Bakrie family – are insisting on pushing through their proposal to drop Mr Rothschild and will launch a charm offensive next week to persuade others to back them, reports the FT. The Bakries and Mr Tan, who together own 29.9 per cent of the voting rights in Bumi, said last Friday that they wanted to remove Mr Rothschild and other key directors from the board. They proposed Mr Tan and Indra Bakrie be named as co-chairmen.
Weekend headlines from the FT and other UK media:* From The FT,- Unilever has agreed to return to the negotiating table with unions to discuss ending a standoff that followed the conglomerate’s move to close its final salary pension scheme- Pertemps is to merge with its former subsidiary Network Holdings in a £100m-plus private equity-backed management buy-out- Indonesia’s Bakrie family and their partner, the businessman Samin Tan, is seeking to remove Nat Rothschild and other Directors from the board of London-listed coal miner Bumi- Old Mutual is to pay out £1bn in a special dividend once shareholders approve the Anglo-South African life and savings group’s planned £2.1bn sale of its Nordic businesses- BP safety Committee Chief to leave board: Sir William Castell will retire from the board of the UK oil group this April- Plus Markets starts looking for buyers: Plus Markets Group has called time on its aim to establish itself as London’s primary exchange for fledgling companies by putting itself up for sale
We can’t let this Bumi RNS go unnoticed: The Company announces that the Directors have received a notice from Borneo Bumi Energi & Metal Pte. Ltd, being the holder of not less than 5 percent of the paid-up voting share capital of the Company, requiring them, pursuant to section 303 of the Companies Act 2006, to convene a general meeting of the Company to consider and if thought fit to pass ordinary resolutions to:
Nat Rothschild has criticised the management and corporate governance at PT Bumi Resources, the Jakarta affiliate of London-listed Bumi plc, calling for a “radical cleaning up” of the Indonesian coal company he is trying to transform into a top-tier global miner. The letter, seen by the FT, has raised tensions between the aristocratic billionaire and his Indonesian co-investors, the Bakrie family, who are Bumi’s largest shareholders. Mr Rothschild, who owns 11 per cent of Bumi, which in turn owns 29 per cent of PT Bumi Resources, said his relations with the Bakrie family was good. The Bakries did not sign the letter, which was addressed to Ari Hudaya, a long-time Bakrie family lieutenant who is chief executive of both PT Bumi Resources and Bumi. A spokesman for the Bakrie family said the letter had taken them by surprise.
So, the billionaire Bakrie Brothers have sorted one of their debt issues. They have struck a deal to sell half of their stake in Nat Rothschild’s cash shell curiosity, Bumi Plc, to an Indonesian businessman.
Indonesia’s Bakrie Group is selling a 23.8 per cent stake in London-listed Bumi, its joint venture with financier Nathaniel Rothschild, to coal miner Borneo Lumbung Energi, Reuters reports, citing a draft statement. The sale of about half of Bakrie’s stake in Bumi, for $1bn, values the Bumi shares at about £10.91 each, which Borneo says is a 6 per cent premium to the last 6-month volume-weighted average price, and would be payable in cash. The deal with Borneo, which is backed by Indonesian investor Samin Tan, would help Bakrie pay off the bulk of an $1.345bn loan and extricate itself from a debt crunch that has weighed on the share price of the world’s largest thermal coal exporter Bumi Resources. The draft statement read: ”(Borneo) has signed a sale and purchase agreement, conditional upon shareholder, regulatory and other approvals, to acquire an effective economic interest of approximately 23.8 percent in Bumi Plc,” Reuters says.
Another twist in what was already an incredibly complex plot at Bumi Plc. Nat Roschild’s shell company turned Indonesia coal play has abandoned an earlier deal with a company controlled by the Bakrie family.
Indonesia’s influential Bakrie family, the largest shareholder in London-listed miner Bumi, is considering selling off assets to repay a $1.34bn loan to a syndicate led by Credit Suisse, the FT reports, citing people familiar with the matter. The family’s most valuable asset is its 47 per cent stake in Bumi, raising the possibility of a sell-down and the introduction of new investors wanting exposure to Indonesia’s most lucrative coal mines. Repayment on the Bakries’ $1.3bn loan, which is due in March 2012, has been brought forward because the market value of the family’s Bumi stake is no longer enough to cover it. The Bakries pledged the entirety of their Bumi shareholding as collateral for the loan. A representative for the Bakrie family could not be reached for comment.