Bakrie Sumatera set to sign long-term rubber agreements
Bakrie Sumatera set to sign long-term rubber agreements
SINGAPORE (Dow Jones): Bakrie Sumatera Plantations will likely sign long-term contracts with two rubber trading firms soon to replace the role of financially ailing Lewis & Peat, the company's chief financial officer, Ambono Janurianto, told Dow Jones Newswires late Monday.
In a wide-ranging interview, Ambono said the Indonesian company intends to sign "two full long-term contracts very soon," he said, while declining to name the companies nor when the contracts would be signed.
Long-term contracts usually last five years, he said.
Bakrie Sumatera owned 75 percent of the Lewis & Peat group, which comprised rubber trading operations in London, Singapore and Connecticut in the U.S.
"Right now, our sales of rubber aren't affected by closure of Lewis & Peat," Ambono said, adding that the group had a 10 percent share of rubber trading in the world market.
Since Bakrie Sumatera signed contracts with the two rubber trading firms in late December or early January to take over the proportion of sales handled by Lewis & Peat, there have been a total of two transactions, said Ambono.
The two "major rubber trading companies" are based in Japan and Europe, he added.
Lewis & Peat handled 25 percent of Bakrie Sumatera's total rubber sale volume during the last quarter of 1999, Ambono said. Prior to that, the trader used to handle more than 25 percent, he added.
The rest of Bakrie Sumatera's rubber sales volume was to end- users and other traders, said Ambono.
He also said Bakrie Sumatera wouldn't limit its rubber sales through the two trading companies to 25 percent.
The Lewis & Peat group ran aground late last year after an audit revealed the use of short-term credit to finance long-term projects.
Its London arm, Lewis & Peat (Rubber) Ltd., was bought Friday by REB Willcox, a wholly-owned subsidiary of UK-based Willington PLC. Lewis & Peat (Singapore) Pte. Ltd., under receivership since Jan. 11, has also been put up for sale.
Ambono declined to comment on any potential buyers of Lewis & Peat (Singapore), saying the sale is completely in the hands of its receivers, international business services firm Ernst & Young.
Lewis & Peat's erstwhile Connecticut-based operations filed for Chapter 11 Jan. 10, and have been negotiating with Dutch banking firm Rabobank to settle financial claims from its bankruptcy.