IBRA to sell Salim's oil palm plantations soon

IBRA to sell Salim's oil palm plantations soon

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
said on Friday that the sale of the 24 oil palm related companies
formerly owned by the Salim Group has been brought down to two
bidders.

Speaking in a press meeting, Dasa Sutantio, head of IBRA's
asset management division, said the agency expected to announce
the winner of the bidding on Monday, a deal that could mark the
agency's second largest sale this year.

"For this year, besides Astra, it might be the second largest
one," Dasa said, but refused to disclose the value of the
deal.

He was referring to the sale of a 39.5 percent stake in PT
Astra International to a consortium from Singapore that had given
the agency Rp 2.03 trillion (about US$220 million at the current
rate) in cash.

Dasa said two investors had given their final bids to take
over all of the 24 companies under Salim's oil palm plantation
business.

"These two (investors) here are the best that have emerged
from the preliminary bid," Dasa said.

He refused to unveil the names of the two bidders but he said
that they were part of seven original bidders, which includes PT
Indofood Sukses Makmur, Guthrie of Malaysia, Cargill/Chase
(Hongkong) consortium, Bhakti Investama, Sartoga/Newbridge, IOI
consortium and Olympus consortium.

Indofood said on Thursday it had dropped its bid after IBRA
changed the timetable for the final bid to Nov. 23.

"With the revised timetable, Indofood as a listed company
would face difficulties in complying with the Capital Market
Supervisory Agency's rules and regulations on the planned
acquisition," Indofood's president Eva Riyanti Hutapea said.

Dasa said the government's Financial Sector Policy Committee
has ruled out Indofood's participation because the company was
affiliated to the Salim Group.

"Any company or individual with debts to the government is not
allowed to take part in the bidding. And this might have been the
reason why Indofood dropped out," he explained.

Salim has a 48 percent stake in Indofood through the Hong
Kong-based First Pacific and has come under fire earlier for its
purchase of the Singapore-based QAF Pte Ltd's shares from IBRA.

IBRA said the Salim Group is one of the country's key players
in the palm oil industry, with the largest planted hectarage of
any company in the world.

The plantations are scattered in various provinces in Sumatra
and Kalimantan and were established between 1986 and 1997.

Some of Salim's palm oil mills also process the palm fruit
into crude palm oil, the agency said.

It further said that Salim's plantations were considered among
the most efficient, even compared to oil palm expert Malaysia.

However, its oil palm plantation business represents only
about 16.28 percent of the total asset value under Holdiko.

IBRA has placed 107 companies of the Salim Group
under Holdiko's supervision.

Thus far, Holdiko's assets have earned IBRA over Rp 5
trillion.

The latest deal being the sale on Friday of Salim's Mosquito
Coil Group (MCG) to the London-based Reckitt Benckiser PLc for Rp
610 billion.

In a press statement, Dasa said Reckitt Benckiser gave the
most attractive offer in a bidding process that began in August
this year.

He said Benckiser had purchased Holdiko's 100 percent stake in
MCG, a manufacturer and distributor of raw materials for mosquito
coils.

Bart Becht, chief executive officer of Benckiser said the
mosquito coil business was highly profitable in Indonesia due to
the country's large population.

"The Mosquito Coil Group will give us a strong platform for
entry into this key market while substantially strengthening our
worldwide presence in pest control, a key company category,"
Becht said in a statement.

IBRA will also put Salim's coal mining company Indocoal for
sale in the first quarter of next year.

Grouped under Indocoal are PT Indotambangraya Megah and PT
Ganda Upayatama, which themselves control four subsidiaries.

Together, the companies control about 564 million metric tons
of coal reserves in East Kalimantan and a total of 120,000
hectares of coal concessions in the province and in South
Sumatra.

According to Dasa, about 15 foreign and five local investors
had expressed their interest in acquiring a stake in Indocoal.

He refused to name them but said they appeared serious in
purchasing the coal mining company.

"These are companies that have a name, are big, have money
and constantly chasing us," he explained. (bkm)