Indofood cancels Golden Agri deal, mulls replacement<\/p>\n
JAKARTA (JP): Publicly listed giant food producer PT Indofood
\nSukses Makmur said on Saturday it had canceled the acquisition of
\nthe Sinar Mas Group-owned oil palm firm PT Golden Agri Resources,
\nintensifying speculation that Indofood may acquire PT Astra Agro
\nLestari instead.<\/p>\n
Indofood president Eva Riyanti Hutapea said Golden Agri had
\nfailed to fully meet certain conditions of the acquisition deal
\nby its Aug. 10 deadline.<\/p>\n
She did not rule out the possibility of seeking a replacement
\nfor the failed acquisition of Golden Agri.<\/p>\n
"The decision to discontinue the planned acquisition of GAR
\n(Golden Agri Resources) does not change Indofood's intention to
\ncontinue to explore investment or management participation when
\nthe right opportunities arise," Eva said.<\/p>\n
In May, Indofood and Golden Agri signed a preliminary deal to
\nacquire the latter's stake of up to 55 percent for around $173
\nmillion.<\/p>\n
The Singapore-listed Golden Agri is a unit of the Sinar Mas
\nGroup's Asia Food Property (AFP).<\/p>\n
Some had questioned the feasibility of the deal given Golden
\nAgri's huge foreign debts of some $400 million.<\/p>\n
There were also concerns over the company's link to the Sinar
\nMas Group, whose unit Asia Pulp & Paper (APP) defaulted on debts
\nof over $12 billion.<\/p>\n
Eva did not elaborate on the reasons Golden Agri failed to
\nmeet the agreement conditions on time.<\/p>\n
But she said earlier that missing data was stalling a due
\ndiligence on Golden Agri, without which the deal would be void.<\/p>\n
Even while Indofood was awaiting Golden Agri's due diligence,
\ntalks surfaced that the company was looking to replace Golden
\nAgri.<\/p>\n
The strongest candidate is publicly listed Agro Lestari, a
\nsubsidiary of the widely diversified PT Astra International.<\/p>\n
Astra officials have said the company was in informal talks
\nwith Indofood regarding Agro Lestari's acquisition.<\/p>\n
Thus far, Indofood remains silent over the rumors, saying only
\nthat it would look into Agro Lestari should Astra make an offer.<\/p>\n
Divesting its palm plantation unit would help Astra pay off
\nits massive foreign debts.<\/p>\n
And Indofood has been long trying to boost revenue from its
\nagribusiness division, which Eva said "provides significant
\nprofit contribution to the company".<\/p>\n
Both companies tried to play down the other side's importance
\nfor meeting their goals -- a further indication that they were
\nserious.<\/p>\n
Astra revealed that more than one buyer had showed interest in
\nAgro Lestari, while Indofood said it was looking at several other
\npalm plantation firms.<\/p>\n
Elsewhere, Indofood said its first half net profit rose to Rp
\n352.7 billion (about $38.75 million), or up 23 percent from last
\nyear's first half net profit.<\/p>\n
The company attributed the increase to lower foreign exchange
\nlosses, with foreign debts as of June 30, 2001 dropping to $448
\nmillion from $680 million in the same period last year.<\/p>\n
First half net sales rose by 23 percent to hit Rp 7.15
\ntrillion on a combination of higher prices and sales volume.<\/p>\n
But an increase in expenses, among others from higher fuel and
\npower prices, as well as a weaker rupiah, weakened Indofood's
\ngross margin to 26 percent against 31 percent the year
\nbefore.(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indofood-cancels-golden-agri-deal-mulls-replacement-1447893297",
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