Bakrie files for Rothschild divorce

Indonesia’s powerful Bakrie family today tabled a dramatic proposal to end its increasingly fraught relationship with the financier Nat Rothschild over their Bumi Plc venture, but with a twist — it’s calling on Rothschild to give up most of his 12% stake in the business, worth about £40 million at today’s prices, as part of the deal.

Bumi Plc’s shares soared by more than 45% today after the Bakrie family proposed an audacious split with the London-listed, Indonesia-focused coal mining investment vehicle which they created with Rothschild before falling out last year. In another twist, the divorce plan has been drawn up by City banker Ian Hannam who was fined £450,000 for market abuse by the Financial Services Authority in April, although he is appealing his fine. He created the original Bumi Bakrie link-up when he was the lead resources dealmaker at JP Morgan Cazenove from whom he resigned following the fine.

The Bakrie family, which owns 23.8% of Bumi, is proposing to acquire all of its operating assets for cash and shares and cancel its stake in the company.Bumi said it would consider the plan as its board met in Singapore today.

Relations between Rothschild and the Bakries soured in November when the financier called for a “radical cleaning-up” of Bumi Resources’ corporate governance — a move which prompted the loss of his position as co-chairman of the Bumi board in March.

They deteriorated further last month, when Bumi launched an investigation into allegations of “irregularities” at Bumi Resources.