Govt agrees to IBRA's deal with Guthrie

Govt agrees to IBRA's deal with Guthrie

JAKARTA (Dow Jones): The government has agreed to the sale of
palm oil plantations to Malaysian firm Kumpulan Guthrie Bhd.
after months of delay caused by political interference in the
deal.

Indonesia's Bank Restructuring Agency, or IBRA, reached a
final agreement with Guthrie earlier this week to sell the
Sumatra plantations formally belonging to the Salim Group, IBRA
Vice President Thomas Lembong said.

"We have surmounted all issues that needed to be resolved in
order to pursue the completion of this transaction," Lembong told
Dow Jones Newswires.

Both parties are likely to sign legal documents on the deal
Friday.

IBRA reached an outline agreement with Guthrie in November
last year, but Parliament stalled the finalization of the deal
amid concern Indonesia was handing prize assets to a regional
competitor.

Vice President Megawati Soekarnoputri, whose party led calls
to delay the sale, earlier this week gave the go-ahead for the
deal.

Guthrie agreed last year to buy 180,000 hectares of
plantations, largely in Sumatra and the Indonesian side of Borneo
island, in a deal worth $350 million.

But the deal appeared to stall when Guthrie asked the
government to issue a confirmation letter saying that a 1999
decree setting a size limit for individual plantation companies
wouldn't apply in this case.

Although the decree wasn't supposed to apply to plantation
companies already in existence, Guthrie's request led to calls
from Parliament to delay the sale.

IBRA then entered a round of lobbying with Megawati, finally
winning approval earlier this week.

IBRA took over the plantation companies from Salim, once
Indonesia's largest conglomerate, following the 1997 financial
crash.