First Pacific says RI exposure at minimal level

First Pacific says RI exposure at minimal level

HONG KONG (Reuters): First Pacific Co Ltd said yesterday the company's exposure to Indonesia was minimal with less than one percent of its profit derived from the country.

"In terms of profit contribution (from Indonesia), it is significantly less than one percent. So our exposure is minimal," said group vice president corporate communications, Robert Sherbin.

"Indonesia was responsible for three percent of our turnover within Asia, so basically about one percent of our turnover comes from Indonesia," he added, noting that the company's main exposure was in the Philippines, Hong Kong and Thailand.

First Pacific's turnover was US$8.3 billion in 1997, of which US$3.5 billion, or about 41 percent, came from Asia.

"The impacts on our business of the recent development in Indonesia are minimal. Our Indonesian operation comprises only a tiny portion of First Pacific," Sherbin said.

"However, we are aware that an exaggerated perception of our exposure to Indonesia is probably weighing down on our share price," he added.

First Pacific shares have fallen HK$0.875, or 23 percent, so far in May and closed at HK$2.85 on Wednesday. The stock fell a further HK$0.05 to HK$2.80 in late Thursday morning trade.

"Even though we have cash that is worth HK$3.65 per share and in addition to the net asset value of the company of about HK$6.50 a share, we are trading at a discount not only to the net asset value but also at a significant discount to the cash that we have in the company," Sherbin said.

"We are not sure why that is, except perhaps a misperception that we are more exposed to Indonesia than we really are."

First Pacific owns about 51 percent of a pharmaceutical company, Darya-Baria, in Indonesia and a 35 percent stake in an Indonesian telecommunications and mobile phone company, Metrosel.

Indonesia's Salim family is the largest single shareholder of First Pacific, holding 31 percent.

Sherbin said First Pacific had no plans to inject funds into other companies under the control of the Salim family.

"That is simply not possible for us to inject assets without minority approval, and I should answer there is no plan whatsoever to do so," Sherbin said.

"There are two ways that it could be done: it could be done through a dividend, and we have stated very explicitly that we do not intend to pay a special dividend to shareholders," he said.

"Or it could be done through the purchase of assets owned by the Salim (family). If that were to take place, that would require approval by minority shareholders, so there is absolutely no plan whatsoever to do that. But even if there were, it would require minority approval," he added.