AOI sells stake overseas amid controversy<\/p>\n
JAKARTA (JP): PT Artika Optima Inti (AOI), the timber division
\nof the Djajanti Group, will sell over 30 percent of its stake to
\nMalaysia Mining Corporation (MMC) despite its controversial plan
\nto float shares on the local stock exchanges.<\/p>\n
MMC, one of Malaysia's major state-owned firms, will buy 31.8
\npercent of AOI's shares at US$147 million according to a
\nmemorandum of understanding signed by representatives of the two
\ncompanies in Kuala Lumpur Monday.<\/p>\n
Effendi Sasrawijaya, AOI's president, said proceeds from the
\nshare divestment would be used to repay bank loans and to
\nstrengthen its capital structure.<\/p>\n
He said that AOI's plan to sell shares to the Malaysian
\ncompany had been approved by State Minister for
\nInvestment\/Chairman of the Investment Coordinating Board Sanyoto
\nSastrowardoyo.<\/p>\n
The announcement of the sale of AOI's stake to the Malaysian
\ncompany came amid controversy over the company's plan to sell
\nshares to the public through the domestic capital market.<\/p>\n
MMC, listed on the Malaysian and British stock exchanges, had
\nevolved from being a company dealing predominantly in tin mining
\nto a diversified group with significant interests in engineering
\nand construction, manufacturing, utility development and
\ninvestment holding.<\/p>\n
Sanyoto, who earlier gave a similar backing to the sale of
\nBarito Timber's stake to another Malaysian firm, described
\nMonday's deal as reflecting the confidence of the overseas
\ninvestors to the Indonesian economy.<\/p>\n
Plan<\/p>\n
Effendi said that AOI would continue with its plan of a public
\noffering on the local stock market despite the deal with the
\nMalaysian firm.<\/p>\n
AOI's plan to float shares on the local stock market, which
\nwas disclosed for the first time late last year, was delayed due
\nto lack of support from Forestry Minister Djamaludin
\nSuryohadikusumo.<\/p>\n
The forestry minister, according to earlier reports, refused
\nto issue a letter of recommendation supporting the public
\noffering plan as the company, which operates a number of forest
\nconcessions in eastern Indonesia, did not have a big enough log
\nsupply to feed its plywood industry.<\/p>\n
Commenting on the sale of AOI's shares to the Malaysian firm,
\nDjamaludin said yesterday that he had not yet received a report
\nabout the deal from AOI's executives.<\/p>\n
The deal is legitimate as long as the transaction involved
\nonly the shares of the company's subsidiaries operating in the
\ntimber industry and not those directly managing its forest
\nconcessions, the minister remarked to newsmen yesterday on the
\nvalidity of the deal. (fhp\/hen)<\/p>",
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