Guthrie claims RI palm oil deal completed<\/p>\n
KUALA LUMPUR (Reuters): Malaysia's Kumpulan Guthrie Bhd. said
\non Wednesday its newly purchased palm oil plantations in
\nIndonesia were up and running, and it had paid Jakarta US$368
\nmillion to close the controversial deal.<\/p>\n
Guthrie also planned to raise Islamic bonds worth around $400
\nmillion to refinance the loan obtained from a consortium of seven
\nlocal banks for the acquisition of 265,777 hectares of land on
\nthe islands of Java, Borneo and Sulawesi. \"It's not only fully
\nsettled...we have already sold CPO (crude palm oil),\" Guthrie's
\nchief executive Abdul Khalid Ibrahim told reporters after an
\nannual shareholders' meeting.<\/p>\n
\"We are raising $400 million to finance our loan. We expect to
\ncomplete this exercise before the end of this year,\" he added.<\/p>\n
Guthrie said it paid the Indonesian Bank Restructuring Agency
\n(IBRA) $368 million in March for the purchase of 25 plantations
\nonce owned by the troubled Salim Group.<\/p>\n
Indonesia is the world's second largest palm oil producer
\nafter Malaysia.<\/p>\n
Critics in Indonesia have expressed concern the deal would
\nlead to foreign domination of the country's lucrative palm oil
\nindustry. Some have even asked for the deal to be canceled.<\/p>\n
But controversy over the deal fails to subside in Indonesia
\neven after Jakarta repeatedly said the issue had been closed.
\nLast week, central government and officials in Riau province on
\nSumatra said they would form a team to help settle the sale.<\/p>\n
The Guthrie deal was IBRA's second biggest sale after the
\naround $500 million it received from selling its stake in
\nIndonesia's largest car maker, Astra International, in 1999.<\/p>\n
Commenting on the development in Riau, Khalid said IBRA had
\nguaranteed Guthrie's ownership of the plantations, which means
\nthe firm could always refer to the agency to claim back its
\nrights each time there are problems.<\/p>\n
Industry sources said among the problems Guthrie will face is
\nunresolved land acquisition, in which small farmers claim their
\nland has been taken in the past by politically well-connected
\nplantation companies without proper compensation.<\/p>\n
Khalid said there were no reports of trouble in the new
\nestates, including those located in Aceh on Sumatra, where rebels
\nhave been fighting for independence for decades.<\/p>\n
\"As far as we are concerned...having managed the estates for
\nalready two months, people in the plantations basically want to
\nwork and continue with their lives,\" he said.<\/p>\n
\"So I think we haven't had any adverse experience in our
\nplantations. We are also in operation in Aceh,\" he added.<\/p>\n
Khalid said Guthrie's plantations in Indonesia were expected
\nto produce at least 600,000 tonnes of crude palm oil starting in
\n2003. Indonesia's CPO production is expected to reach 7.2 million
\ntonnes in 2001, up from 6.5 million tonnes last year.<\/p>\n
Guthrie has 110,000 hectares of oil palm holdings in Malaysia
\nand much of its revenues come from palm oil.<\/p>",
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