Indofood confident of recouping bank collateral

JAKARTA (JP): Publicly listed food producer PT Indofood Sukses Makmur said on Friday it was unconcerned over the status of US$50 million in collateral pledged for loans provided to its subsidiary companies, amid worries over the prospect of recouping the collateral.

"I have no concerns," said Indofood president Eva Riyanti Hutapea when asked about the risk of not regaining Indofood's collateral.

Speaking to reporters at her office, Eva said she was upbeat that Indofood's collateral issue could be resolved any day now.

Indofood pledged its $50 million deposits as banking collateral for loans channeled to several palm oil plantation companies it jointly owns with PT Holdiko Perkasa.

Eva said Indofood can recoup its collateral after Holdiko finalizes the sale of its stake in the companies to Malaysian palm oil giant Kumpulan Guthrie Bhd.

Guthrie has said it would replace Indofood's collateral once it concludes the purchase of the 24 plantation firms under Holdiko.

"That deal can happen very soon now," Eva said.

Yet Guthrie has expressed its reluctance to ink a deal with Holdiko if controversy over its plan to take over the plantations remains unresolved.

The debate over Guthrie's acquisition agreement arose last year and has already prevented the final deal from being processed in December.

Legislators charged the sales as selling out Indonesia's vast plantations to the country's main palm oil competitor, Malaysia.

The prospects of the plantation companies repaying the loans also remains unclear, with Eva admitting she did not know whether repayments had started yet.

She said that these companies borrowed some Rp 400 billion (about $40.81 million) in 1998 from Bank Risjad Salim International, which has since been merged into Bank Danamon.

Although huge in size, the plantations under these companies have only just begun to produce, she said.

The loans, she went on, were needed to keep the plantations operating, thus raising their value before prospective bidders.

Holdiko is a holding company comprising assets surrendered by the Salim Group as collateral to the Indonesian Bank Restructuring Agency (IBRA).

Holdiko owns a 75 percent stake in 19 plantation firms for which Indofood had surrendered its $50 million in deposits, Eva explained, adding that Indofood owned a 20 percent stake in these companies.

She said the $50 million in collateral came from time deposits of another group of five plantation firms, in which Indofood owns an 80 percent stake and Holdiko a 20 percent stake.

Guthrie plans to purchase Holdiko's stake in both plantation groups.

Eva said that Indofood, also part of the Salim Group, initially hoped to purchase Holdiko's stake, but the government had rejected the company's bid.

At present, Eva said, Indofood was still seeking to expand its palm oil plantation business.

She said the company had allotted some $200 million for future investment projects.

"We're still looking, but to date we haven't seen plantations that are big enough for us," she said. According to her, Indofood is eying several small plantation firms in West Sumatra and in Kalimantan.

Asked on this year's outlook, she expressed confidence that the company would perform better than last year, providing the rupiah does not fall below Rp 10,500 against the U.S dollar.

Indofood booked a net profit of Rp 646 billion last year, a hefty 54 percent drop from the Rp 1.39 trillion in profits posted the year before. (bkm)