Bumi weighed down by family’s financial past

WHEN Nat Rothschild decided to team up with the Indonesian billionaire Bakries last year to form coal mining company Bumi, there were concerns that the family’s past financial dramas could weigh heavily on sentiment towards the group.

The Bakrie family’s announcement last week that its lenders Credit Suisse had called in a $1.3bn (£840m) loan held against its Bumi stock added to investor uncertainty. Bumi’s future now rests partially on its largest shareholder’s decision over how to refinance. The Bakrie empire, controlled by leading politician and presidential candidate Aburizal Bakrie, encompasses every sector in Indonesia, with seven companies listed on the Indonesia stock exchange.

The group has been hampered with financial difficulties in the past. There was a debt restructuring in 2000 and a further crisis in 2008 following the collapse in the value of shares that had been used as collateral for loans.

Then it had to turn for help to US private equity firm TPG-affiliated Northstar Pacific, Ancora Capital and Brentwood Ventures to help repay $1.4bn of debt.

If the group emerges unscathed again, it would be the third time it has survived a liquidity problem.