Bumi confident on Bakrie split as seeks lost cash

Fri May 31, 2013 6:41am EDT
 
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By Sarah Young

LONDON (Reuters) - Indonesia-focused coal miner Bumi Plc BUMIP.L said on Friday it was pressing ahead with a split from its co-founding Bakrie family as it tied up a review of unit Berau, telling investors more than $200 million had been lost at the operations.

Bumi's board hopes to turn the company around after a probe into financial irregularities and feuding between the Bakrie family and co-founder Nat Rothschild.

They plan to split from the Bakries and unit PT Bumi, leaving Bumi focusing solely focused on 85 percent-owned Berau (BRAU.JK: Quote)

Posting a $52 million annual loss for 2012 in long-delayed earnings, Bumi said falling thermal coal prices meant it would write down the value of PT Berau by $815 million and of its investment in PT Bumi - the Jakarta-listed unit it plans to part with - by $1.39 billion.

Bumi also said it had completed a review of irregularities in the accounts of Berau - the process which held back publication of 2012 results - which identified expenditure of $201 million which had no clear business purpose.

It said it was in talks to recover the lost cash but chief executive Nick Von Schirnding conceded that it was possible that it would be permanently lost. He declined to say who the discussions were with.

"We are appalled but not surprised by the extent of malfeasance that has been documented today by Bumi," Rothschild, who owns an 11 percent stake in the company, said in an emailed statement, adding that he planned to issue a more comprehensive response in due course.

SPLIT STILL ON TRACK   Continued...

 
Nick von Schirnding, Chief Executive Officer and Executive Director of Bumi arrives before a shareholder meeting in London February 21, 2013. REUTERS/Stefan Wermuth