BAT eyes large savings from Rothmans acquisition<\/p>\n
JAKARTA (JP): PT British American Tobacco (BAT) Indonesia said
\non Tuesday that the company's Rp 210 billion (US$30 million)
\nacquisition of PT Rothmans of Pall Mall Indonesia would enable it
\nto save Rp 40 billion in annual operational costs.<\/p>\n
BAT Indonesia finance director Martin Mueller said that after
\nthe acquisition the company would have a reduced executive salary
\nburden, reduced network distribution costs and greater economic
\nscale.<\/p>\n
Mueller said the company, which after the acquisition would
\nhave total combined assets of Rp 840 billion, would be led by one
\nboard of directors only.<\/p>\n
"There will also be meaningful cuts in the distribution
\nnetwork to reduce overhead cost," Mueller said after the
\ncompany's extraordinary shareholders' meeting.<\/p>\n
He said the company would also have a better negotiating
\nposition with its raw material suppliers because it could order
\nin a greater variety of supplies.<\/p>\n
First announced in mid-November, the BAT Indonesia acquisition
\nof over a 99.99 percent stake of PT Rothmans of Pall Mall
\nIndonesia received on Tuesday the approval of its shareholders.<\/p>\n
Company president Mark Jennings said some 95 percent of BAT
\nIndonesia shareholders were present at the voting of the proposed
\nacquisition plan, with 82 percent agreeing to the deal.<\/p>\n
Jennings said the acquisition would be funded by a bridging
\nloan from the BAT Group, which would be repaid with proceeds from
\na rights issue to be conducted by the company in the first
\nquarter of next year<\/p>\n
Mueller said the loan would be on a tenor of between three and
\nfour months, with the interest rate put at plus one percent JIBOR
\n(Jakarta Inter-Bank Offered Rate).<\/p>\n
"The (bridging) loan is needed so we are able to move quickly
\nin the uncertainty," Mueller said.<\/p>\n
He said the acquisition was part of the global merger of
\nBritish American Tobacco plc and Rothmans International BV.<\/p>\n
With domestic operations beginning in 1917, the Jakarta Stock
\nExchange-listed company is one of the country's oldest cigarette
\nproducers.<\/p>\n
It produces regular brands including Lucky Strike, Kent,
\nState Express 555, Kent, Benson & Hedges, Ardath and Commodore.<\/p>\n
As of October this year, the company had produced a total of
\n15.40 billion cigarettes.<\/p>\n
Its unaudited assets were valued on Sept. 30 this year at Rp
\n684.5 billion ($97.8 million), up from Rp 523 billion in the
\ncorresponding period last year.<\/p>\n
The company recorded a net income of Rp 73.4 billion in the
\nfirst nine months of the year, as compared to Rp 19.3 billion in
\nthe same period last year.<\/p>\n
Rothmans of Pall Mall Indonesia, a unit of Australia's
\nRothmans Holding Limited, had assets valued at Rp 224.2 billion.<\/p>\n
It was previously known as PT Faroka, a cigarettemaker
\nestablished in 1932 in Malang, East Java. The company changed its
\nname in 1987 to Rothmans of Pall Mall Indonesia.<\/p>\n
Rothmans has about a 20 percent share in the domestic regular
\n(non-clove) cigarette market, with two primary brands Dunhill and
\nKansas. (udi)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bat-eyes-large-savings-from-rothmans-acquisition-1447893297",
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