Bumi Share Price Plunges as Mining Group Resumes Trading

on Jul 22, 2013

iNVEZZ.com, Monday, July 22nd: London-listed coal miner Bumi Plc (LON:BUMI) returned to trading on the London Stock Exchange today following a three-month suspension as a result of the company failing to publish its 2012 audited full-year results on time. Bumi’s share price plunged nine percent at the opening bell in London.

**Bumi Resumes Trading in London**
In a statement today Bumi announced the restoration of trading of its voting ordinary shares, following discussions with the Financial Conduct Authority. As the Financial Times has reported, Bumi’s share price opened nine percent below 259.30p, the price when trading was suspended on April 22 after the miner said it would not be able to meet the deadline for publishing its audited full-year results for 2012 amid allegations of financial impropriety at an Indonesian subsidiary.

Bumi’s issues with its accounts were revealed in May when the miner reported missing funds at Berau Coal Energy, in which Bumi has an 84.7 percent stake. In its full-year statement, eventually released on May 31, the coal producer said that a total of $201 million (£131 million) spent by Berau in 2011 and 2012 “had no clear business purpose”.

Bumi “has taken considerable steps to enhance its internal systems and controls” in relation to Berau, the company said in today’s statement, adding that “a detailed and rigorous process was undertaken to enhance Bumi’s control procedures” over the unit. Bumi noted that the process had also included a third-party review.
**Ownership Battle**

Bumi has also been at the heart of an ownership dispute between co-founders Nathaniel Rothschild and the powerful Indonesian Bakrie family since the $3 billion deal which brought them together in 2011. As The Times reported earlier this month, Bumi Plc’s chairman Samin Tan agreed to double his stake in the company to 47.6 percent by buying out the Bakries for $223 million.

The Times quoted Rothschild as saying at the time that any deal which left Mr Tan with an enlarged stake was unacceptable because he was an ally of the Bakries. Earlier terms of the deal would have left Rothschild with greater voting power than he has. Rothschild now owns 14.8 percent of Bumi.
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“The primary source of Bumi’s difficulties over the past three years has been the concentrated control by the Bakrie concert party, which included Samin Tan,” Rothschild noted. “This deal does not change that.” As the FT has reported, the deal is pending a waiver from London regulators and approval from the independent shareholders.
The FT quoted Rothschild as saying that the initial Bumi-Bakrie separation proposal would have offered better value to shareholders.
“Today’s share price re-opening of £2.50 contrasts with previous analysis consensus values of £3.65-£4.00 under the original deal, that was described as ‘fixed’,” Rothschild said, as quoted by the FT. “This board is ushering through a value transfer to Samin Tan, of well in excess of £1 in value, and
shareholders should hold out for a better deal.”
**Bumi’s share price was 8.52 percent down at 237.20p in London as of 13:49 BST on 22 July 2013.**