By Sarah Young

LONDON (Reuters) - Indonesia-focused coal miner Bumi Plc said on Friday it was pressing ahead with a split from its co-founding Bakrie family as it tied up a review of unit Berau, telling investors more than $200 million had been lost at the operations.

Bumi's board hopes to turn the company around after a probe into financial irregularities and feuding between the Bakrie family and co-founder Nat Rothschild.

They plan to split from the Bakries and unit PT Bumi, leaving Bumi focusing solely focused on 85 percent-owned Berau

Posting a $52 million annual loss for 2012 in long-delayed earnings, Bumi said falling thermal coal prices meant it would write down the value of PT Berau by $815 million and of its investment in PT Bumi - the Jakarta-listed unit it plans to part with - by $1.39 billion.

Bumi also said it had completed a review of irregularities in the accounts of Berau - the process which held back publication of 2012 results - which identified expenditure of $201 million which had no clear business purpose.

It said it was in talks to recover the lost cash but chief executive Nick Von Schirnding conceded that it was possible that it would be permanently lost. He declined to say who the discussions were with.

"We are appalled but not surprised by the extent of malfeasance that has been documented today by Bumi," Rothschild, who owns an 11 percent stake in the company, said in an emailed statement, adding that he planned to issue a more comprehensive response in due course.

SPLIT STILL ON TRACK

The plan to draw a line under what Von Schirnding called "a huge mess" by separating from Indonesia's influential Bakrie family, was, however, still on track.

"I'm very confident that the separation will go ahead," he told reporters.

He added that the Bakries, whom he met in Singapore earlier this week, had assured him that the "requisite funding will be there" and that he hoped the company would be able to put the deal to shareholders before the autumn.

Under the terms of the split, the Bakries will pay Bumi $278 million in cash for an 18.9 percent stake in Bumi Resources , of which $50 million is already held in escrow to ease investor concerns over the debt-burdened Bakries' ability to fund the deal.

"Operationally the business continues to perform ahead of our expectations, although rightly, the key value drivers in the near term will be the Bakrie/Bumi Resources separation and restoring the market's faith in corporate governance," said Liberum analysts in a note.

Shares in the company have been savaged - they are down 80 percent since the listing - not only by the corporate governance issues but also by weak thermal coal prices.

The company's Berau business produced 27 percent more coal in the first quarter of 2013 compared with the same period last year, although the average selling price was 19 percent lower on costs which it cut by 7 percent.

"We are facing troubled coal markets still as we speak, though I believe we have reached close to the bottom of thermal coal pricing," Schirnding said.

Bumi, whose shares have been suspended due to a two-month delay in the publishing of its earnings, said it would apply for its shares to resume trading only after it completes an overhaul of "external systems and controls" due to be finalized before the company's shareholder meeting on June 26.

He added that the company's search for a new independent chairman was advanced and that he was hopeful of making an announcement in the next few weeks.

(Additional reporting by Clara Ferreira-Marques; Editing by David Cowell)

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