Coalmining company Bumi Plc said it would go ahead with a split deal with Indonesian co-founders, the Bakrie family. This is despite word that there is no proof that the family can finance the split, according to a report by Reuters.
Bumi was formed in 2010 with the goal of leading London investors to Indonesian mining firms. However, it was torn by shareholder battles when thermal coal prices went down, said the report.
According to the London-listed company, it would hold a voting session on December 4 to decide on the separation deal. The company hopes that this would accelerate its split from the Bakries and give it a fresh start, the report stated.
The proposed separation would result in the sale of the Bakries' stake to current partner Samin Tan. The family would then buy back 29.2% of Bumi's stake in its PT Bumi unit for USD501 million. Both of these deals should be accomplished at the same time, said Reuters.
For the split to be completed, the Bakries should be able to provide the cash requirement of USD280 million. This amount would account for the difference between the company's London stake price and PT Bumi holdings. However, if there is no proof that the Bakrie family has the cash, then the deal would collapse before its target December completion, Reuters reported.
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