LONDON (ShareCast) - Under-pressure coal miner Bumi plc has recommended shareholders vote against resolutions put forward by founder Nathaniel Rothschild to get rid of most of the company's directors, saying that the proposed changes are 'not the way forward'.
Rothschild, who himself stepped down from the board in October, has proposed replacing 12 of the 14 current directors in the midst of company infighting with Indonesia's Bakrie family, also co-founders. Through his investment vehicle, NR Investments, he owns an 18.2% stake in the FTSE 250 (FTSE: ^FTMC - news) group.
However, the two boardroom members that would remain after these management changes, Sir Graham Hearne and Steven Shapiro, have revealed that they would not endorse this shake-up and would resign if it goes ahead.
The company said that the key for Bumi plc is to execute the proposed separation of itself from the Bakrie Group and Bumi Resources, in which it holds a 29% stake.
This proposed transactions is currently valued at more than $580m to shareholders through the cancellation of Bakrie's 23.8% stake in Bumi plc, and the disposal of Bumi Resources.
These funds can then be reinvested in the company's 85% controlled subsidiary, Berau, or otherwise deployed to optimise returns to shareholders, Bumi said.
The company concluded: "Your directors are determined to effect the separation of the company from the Bakrie Group and Bumi Resources and move towards restoring shareholder value. A VOTE AGAINST the NR Resolutions enables this to happen. The alternative put forward by Mr. Rothschild will lead to stalemate, continued shareholder infighting and value destruction."
Budianto appointment draws criticism
In a separate statement on Tuesday, the firm said that Eko Budianto will replace Rosan Roeslani as President Director of PT Berau Coal Energy Tbk and its operating company PT Berau Coal.
The appointment of Budianto, who was previously the Director of Operations at PT Berau Coal's mining operations, is another controversial issue for Bumi.
Rothschild has complained that he is not wholly independent as he is linked with the Bakrie family.
Meanwhile, Roselani's departure comes after claims by the Takeover Panel that there had been improper disclosure into his relationship with the Bakries. Roselani owns 9.8% of Bumi.