Budi Acid Jaya to take over tapioca mills

Budi Acid Jaya to take over tapioca mills

JAKARTA (JP): PT Budi Acid Jaya, a cassava processing factory,
which is listed on the Jakarta stock exchange, announced over the
weekend that its plan to acquire Sungai Budi Group, worth Rp 66
billion (US$28.9 million), has been approved by its shareholders.

"The extraordinary shareholders meeting on Friday agreed on
the company's plan to acquire six tapioca factories and three
plastic packaging plants, with a 15 percent discount on the price
of the Sungai Budi Group's assets," Sudarmo Tasmin, a director of
the company, said.

He added that the acquisition would make Budi Acid Jaya the
biggest tapioca producer in Southeast Asia.

After the acquisition, Budi Acid Jaya will increase its
production capacity from 255,000 tons of tapioca to 510,000 tons
of tapioca per annum, Tasmin said.

According to the company's statement, the acquisition will be
financed by the issuance of exchangeable bonds by one of Budi
Acid's majority shareholders.

The bonds, which can eventually be converted into shares at an
agreed price of Rp 5,500 each, will be bought by the Government
of Singapore Investment Corporation (GIC) and the Walden Group of
International Venture Capital Funds.

The GIC and Walden Group will be new investors in Budi Acid
through their purchases of the bonds, worth $26 million and $3
million respectively, the statement read.

The bonds will be issued with an annual interest rate of 4.4
percent.

GIC is the Singapore government-owned company which invests in
more than 20 countries and owns representative offices in New
York, Tokyo, London, Frankfurt, San Francisco, Hong Kong and
Bangkok.

Walden International Investment Group is a subdivision of
Walden in Asia which manages funds of $550 million and has
offices in China, Hong Kong, Malaysia, the Philippines,
Singapore, Taiwan and the United States.

The meeting also agreed on Budi Acid Jaya's plan to invest $18
million to establish a joint venture company with British Sugar
Ltd. to produce glucose and fructose.

Budi Acid Jaya's latest consolidated statement of income
reported its net sales in the first semester at Rp 52.1 billion
($22.8 million), net income Rp 12.1 billion ($5.3 million) and
net income per share Rp 149 (about US$0.06).(kod)