Bumi agrees to shareholder vote amid battle for control
- 8 January 2013
- From the section Business
Coal miner Bumi is facing a battle for control after agreeing to a shareholder vote that will decide the future of the majority of its board members.
Nathaniel Rothschild, co-founder of Bumi, had demanded the vote in an attempt to return to the firm's board.
He had quit the board last year amid a row with Indonesia's Bakrie family.
Bumi owns a stake in key Bakrie assets and there have been tensions between the two over potential irregularities at one of the Bakrie firms.
The vote will take place in February, although an exact date is yet to be decided.
The dispute revolves around Bakries' Indonesian firm PT Bumi Resources, in which Bumi owns a 29% stake.
Mr Rothschild had called for a radical clean-up at the firm in 2011, leading to relations between the two being soured. Last year, Bumi began an inquiry into what it said were "potential financial and other irregularities" at the firm.
As the discord grew, the Bakrie family offered to buy back its assets from Bumi for an estimated $1.4bn (£870m) and split from the firm.
However, Mr Rothschild said the proposal was "not in the interests of minority shareholders" and resigned from the board.
The deteriorating relations between the two key shareholders have stoked fears about the future of the firm and hurt its share price.
Its shares have plunged more than 65% in the past 12 months.
Bumi has also been hurt by a drop in coal prices, which has hurt its earnings and forced it to review its expansion plans.
Mr Rothschild now wants to oust 12 of the 14 board members and bring in new ones in an effort to turn the firm around.
"The calling of this general meeting will offer shareholders a clear choice between the board and its strategy of separation from the Bakrie Group, approved unanimously by the independent directors, and Nat Rothschild and his associates," Nick von Schirnding, chief executive of Bumi said.