Indonesian coal entrepreneur Samin Tan has been appointed as chairman of coal miner Bumi Plc., and co-founder Nathaniel Rothschild was ousted from a co-chairman position after a public spat between Rothschild and fellow owners, the Bakrie Group.
Rothschild had clashed with the Bakrie Group and called for a “radical cleaning up” in its “over-leveraged” Bumi Resources, of which Rothschild owns approximately 12 percent through Bumi Plc.
Bakrie then sold a 23.8 percent stake in Bumi Plc. to Samin Tan’s PT Borneo Lumbung Energi. This team-up, accounting for 29.9 percent of Bumi Plc., caused Rothschild to lose his position as co-chairman.
Rothschild retains a role as independent director at Bumi Plc., while former chairman Indra Bakrie will be co-chairman. Nalin Rathod, a key Bakrie ally, is now chief executive officer of Bumi Plc. and Scott Merrillees is chief financial officer.
“In my opening statement in the meeting yesterday, after I was installed as a chairman, [I said that] like it or not, we knew there had been internal disputes previously. So I called on everyone to put those [aside],” Samin Tan told reporters as quoted by Reuters.
“From now on let’s just look ahead, work hard and move forward. I hope that from now on you won’t see any more arguments, especially in the public domain.”
The new management has extensive coal-mining experience in Indonesia, spanning 20 years, according to Bumi Plc.’s official statement submitted to the London Stock Exchange.
“The management changes will strengthen our team and also increase the presence of key executives in London,” Samin Tan said in the statement. “I have every confidence that we have the capacity to deliver on our stated goal of becoming the leading FTSE [Financial Times Stock Exchange] thermal coal company.”
The announcement pushed up share prices of Bumi Plc. in London trading over 4 percent to 725 pence upon market opening. The shares had fallen more than 20 percent since the dispute became public.
Alongside the change in management, Bumi also announced on Tuesday an annual loss of US$282 million in 2011, following a $108 million loss in 2010, due to one-off accounting write-downs related to share price changes after the deal to create Bumi Plc. was completed.
Operating profits rose significantly, however, to $280 million last year from a $47 million loss the previous year, thanks to rising coal prices.
“We are implementing a number of new initiatives across the group to optimize productivity,” said Bumi Plc. new chief executive Nalin Rathod.
Bumi Plc. expects to deliver 75 million tons of coal this year from subsidiaries PT Bumi Resources (BUMI) and 23 million tons from PT Berau Coal Energy (BRAU), he added.