Nat Rothschild’s Bumi plan still faces obstacles 11 Dec 2012 The financier said that top Bumi Plc shareholders back his plan for unwinding the disastrous mining tie-up with Indonesia’s Bakrie family. Investors cheered but the mechanics are murky and a clean break looks tricky. Even if it works, Rothschild’s reputation won’t recover fast.
Indonesia’s Bob Marley economy’s gonna be alright 19 Oct 2012 Every little thing seems to be conspiring against it: poor infrastructure, political corruption, regulatory caprice and bureaucratic inertia. Falling commodities threaten the spread of wealth to poorer parts. But Indonesia’s immaturity gives it the resilience to muddle through.
Nat Rothschild better out than in at Bumi 16 Oct 2012 The financier’s resignation from the troubled coal company he helped create smoothes the way for a proposed exit by Bumi’s Indonesian partners. As an outsider Rothschild can argue publicly for giving minority shareholders full value - and maybe restore his reputation on the way.
Bumi should grit teeth and engage with Bakries 11 Oct 2012 The troubled acquisition vehicle has a rescue bid of sorts from its Indonesian backers. The Bakries would cancel their holding in return for a stake in coal assets they sold to Bumi last year. It’s awkward in every sense. But the Bumi board has to maximize value and should talk.
Indonesia may be unfairly tarred by Bumi’s brush 4 Oct 2012 The heavily indebted coal miner may sell assets or equity after its London-based parent said it would probe potential fraud. With coal prices weak, Bumi’s plight is trouble for feuding shareholders and creditors. But investors would be wrong to see it as a metaphor for Indonesia.
Bumi fiasco shows danger of bad incentives in M&A 28 Sep 2012 Whatever the truth behind alleged financial irregularities at the Indonesian coal miner, Bumi’s woes raise questions about the incentives that drove Nat Rothschild and other big names in finance to migrate the emerging-market miner to London. Merge in haste, repent at leisure.
Sunshine may only be partial disinfectant for Bumi 25 Sep 2012 An investigation instigated by independent directors could see a governance revamp at the troubled UK-listed miner. But that won’t tackle the fundamental problem, the fact that Bumi’s main asset is a minority holding that now looks more like a bombed-out financial investment.
Bumi reputational damage will spread far and wide 24 Sep 2012 The mining-focused acquisition vehicle has tumbled in value amid alleged financial irregularities in its Indonesian assets. A lack of information makes the shares hard to touch right now. And whatever the final financial fallout, the affair rubs off badly on the London market.
Indonesia’s insolvency law is broke, needs fixing 20 Sep 2012 A court has declared the nation’s largest mobile operator bankrupt following a dispute over just $557,000. If the past is any guide, the verdict will be overturned. But Jakarta must revise its insolvency law before investors who have shrugged off the incident change their minds.
Coal’s slide poses broader risks for Indonesia 11 Sep 2012 It’s the biggest exporter of coal for electricity, but coal accounts for only 4.4 pct of GDP. The bigger worry is that falling exports spook foreign investors, undermine a provincial boom, and hurt poor workers. With elections looming, that could ratchet up nationalist rhetoric.
‘Peak’ resource nationalism could get messy 6 Aug 2012 Miners see a silver lining in the fading super-cycle: it lets them be pickier about working with grabby governments. But existing projects will always be vulnerable to expropriation. And populist pandering doesn’t necessarily wax and wane in lock-step with commodity prices.
Indonesia rediscovers the Faustian bargain of FDI 11 Jun 2012 The central bank is fighting to defend the currency from foreign dismay over shifting policies. Record foreign direct investment is a vote of confidence, but does not confer carte blanche. Big inflows actually make Indonesia more, not less, susceptible to foreign mood swings.
Lady Gaga not the only one turned off by Indonesia 28 May 2012 The pop diva nixed a planned show over conservative protests and demands she tone down her act. Investors feel similar about demands they cede some control in mining and finance. Many are now selling stocks and the rupiah. Indonesia’s assertive new strut may backfire.
Asia’s bonds look shinier as Europe and China slump 16 May 2012 The region’s robust finances have made its sovereign debt a safe haven as bigger economies stall. An indiscriminate sell-off will affect everyone, but Indonesia, Japan and the Philippines all have qualities that should leave them less hard hit.
DBS deal tests Indonesia’s deep Singapore-phobia 24 Apr 2012 Even a 52 percent premium may not secure the Singaporean bank’s $7.2 bln takeover of Bank Danamon. A deal would benefit all sides and burnish Indonesia’s image as a hot investment destination to boot. But looming elections and longstanding mistrust may trump commercial logic.
Temasek on top in SE Asia bank stake swap 2 Apr 2012 The Singaporean fund will exchange its stake in Indonesia’s Bank Danamon for an enlarged slice of DBS, a bigger lender based in its home state. The price is high and there are integration dangers for DBS. But if all goes well, Temasek will enjoy a windfall of almost $2 billion.
Indonesia’s mining asset-grab overplays its hand 8 Mar 2012 A decree forcing foreign miners to cut their stakes in projects below 50 percent shows worrying disregard for overseas capital. Indonesia’s finances are robust, but ongoing fuel supply issues, caused by a lack of energy investment, show it can’t afford to play too rough.
Indonesia risks falling out of fashion in 2012 21 Dec 2011 It passed a long-awaited law to clear infrastructure bottlenecks and won an upgrade from Fitch. Yet these were already priced in. As global investors retreat from risky markets, Indonesia’s risks for investors are on the downside - even though its economy should remain strong.
Nat Rothschild’s Bumi broadside reveals weakness 10 Nov 2011 The investor’s coal bet looks messier by the day. He’s now trying to embarrass his Indonesian partners into fixing governance shortcomings that were apparent from the start. Outside investors could ultimately benefit. But by going public Rothschild has shown his lack of power.
Credit Suisse has awkward role in Nat’s coal deal 14 Oct 2011 The bank is broker to Nat Rothschild’s mining vehicle, Bumi Plc, and lender and sometime adviser to his partners, Indonesia’s powerful Bakrie family. That’s a tricky position now the Bakries are scrambling to meet a margin call on a $1.3 bln loan - arranged by Credit Suisse.