Fri, 24 Nov 2000

Indofood drops plan to buy oil palm plantations

JAKARTA (JP): Publicly listed Indofood Sukses Makmur has dropped a plan to acquire several oil palm plantations under the control of the Indonesian Bank Restructuring Agency (IBRA).

Indofood's president Eva Riyanti Hutapea said on Thursday that the company, which submitted a non-binding bid to IBRA on Oct. 16 and was shortlisted with six other bidders, would not join the final bid process.

Eva said Indofood was the only national strategic investor operating under the domestic investment law (PMDN) and it was prepared to compete fairly with all the other bidders.

"But there is an objection from the government which connected Indofood's planned acquisition with MSAA issues," he said in a reference to the Master of Settlement and Acquisition Agreement or MSAA signed by the Salim Group with IBRA, a part of the finance ministry.

The government is seeking to revise the MSAA with the Salim Group to allow it to acquire more assets to ensure a full payment for the business group's debts.

The Salim Group, which owns a 48 percent stake in Indofood through the Hong Kong-based First Pacific, has been under fire after it repurchased the Singapore-based QAF Pte. Ltd.'s shares from IBRA recently.

QAF's shares were among the assets surrendered by the business group in payment of its debts.

Eva said that under IBRA's revised timetable for the bidding of the oil palm plantation companies, all bidders including Indofood had to submit their final/binding bid on Nov.23.

"With the very limited time frame set up by IBRA and as a listed company, Indofood would have difficulties in complying with prevailing Bapepam (Capital Market Supervisory Board) rules and regulations related to the planned acquisition," she said.

"The prevailing Bapepam rules include the need to present the anticipated impact of the planned acquisition to Indofood's financial performance," she noted.

"There were also constraints faced by professional consultants to issue fair and independent opinions due to the limited data and information provided by IBRA during the due diligence," Riyanti Hutapea said. (hen)