Guthrie bhd. deal will be closed this week: IBRA

Guthrie bhd. deal will be closed this week: IBRA

JAKARTA (Reuters): Indonesia's Bank Restructuring Agency (IBRA) said on Tuesday a delayed oil palm plantation deal with Malaysia's Kumpulan Guthrie Bhd. would be closed this week as all legal hurdles had been cleared.

"Within this week, at the earliest Thursday," a senior IBRA official, who did not want to be named, told Reuters. "All the legal documents to consummate a closing of the deal have been done."

The Rp 3.6 trillion (US$365 million) deal was thrown into doubt after the powerful agency early last month said, without explanation, the closure would be delayed for several weeks.

Critics have also expressed concern the deal would lead to foreign domination of the country's lucrative palm oil industry and trigger demands for land compensation from local farmers.

The deal is the second-biggest for IBRA which said the conversion of the sale's proceeds would boost the ailing rupiah.

"Once that money comes to IBRA we will submit it to the Ministry of Finance and then it will go toward their arsenal of dollars that can be used to help strengthen the rupiah and if you hold dollars, this is the time to sell," the official said.

Lingering political and economic problems and sporadic bouts of violence have eaten away at the rupiah in the past year, wiping off some 25 percent of its value against the dollar.

At 0635 GMT it was quoted at 9,862/9,872.

The deal's closure will also show increasingly skeptical foreign investors they are being taken seriously in the effort to revive the country's battered economy.

IBRA originally said the deal for 25 plantations, formerly owned by the once-dominant Salim Group, would be closed in early February.

The sale was first announced more than three months ago and helped the agency surpass its Rp 18.9 trillion target, as required under the 2000 budget.

IBRA is regularly criticized for its tardiness in selling assets but much of it is due to political bickering and bureaucracy.

The plantations span some 265,776 hectares in the Sumatran provinces of Aceh, Riau, Jambi and South Sumatra and in Central and South Kalimantan and Central Sulawesi.

The Salim Group is IBRA's biggest debtor, with its more than 100 companies owing some Rp 53 trillion.