Bumi plc, Bakrie Group sign separation deal

By Ruli Setiawan

LSE-listed Bumi plc announced that it has signed a heads of terms agreement (HoT) regarding separation from the Bakrie Group and PT Bumi Resources Tbk.

The HoT sets out the key terms of the Transaction which will allow the company to divest its entire stake in Bumi Resources and remove the Bakrie Group from the company and incorporates an obligation for the Bakrie Group to provide a US$50 million deposit.

Nick von Schirnding, CEO of Bumi, said, "The signing of these heads of terms demonstrates tangible progress towards the execution of the separation from the Bakrie Group and Bumi Resources. The core financial terms of this transaction, which is significantly value-accretive for Bumi shareholders, are now fixed. The US$50m deposit incentivises the Bakrie Group to secure the necessary cash to complete the deal. Reaching this milestone yet again highlights the fact that under the current Board the separation from the Bakrie Group can be achieved but if Nat Rothschild's resolutions are passed it cannot."

The key provisions of the Transaction among others are the Bakrie Entities will cancel their indirect holding of 57,298,534 shares in Bumi plc amounting to 23.8% of the total issued ordinary share capital of Bumi plc in exchange for the transfer to the Bakrie Group of shares in Bumi Resources held by Bumi plc equating to 2,316,967,115 Bumi Resources shares equal to 10.3% of the entire issued shares in Bumi Resources. Bumi plc will also sell to the Bakrie Group the remaining 3,924,732,522 Bumi Resources shares held by Bumi plc, equal to 18.9% of the entire issued shares in Bumi Resources, for US$278m payable in cash (the "Share Sale") and Bakrie Group will be required to place US$278m in escrow within 5 business days of signing a definitive agreement relating to the Transaction.

Editing by Adianto P. Simamora