Indofood plans to sell Bogasari

JAKARTA (JP): Publicly listed food giant PT Indofood Sukses Makmur said on Wednesday that it would spin off its PT Bogasari Flour Mills and then sell it to strategic investors to increase its funds.

Indofood Chief Operating Officer Eva Riyanti Hutapea said here that the spin off would separate Bogasari from Indofood and make it an independent company.

"We will soon spin off Bogasari, then we will seek new strategic partners," Eva told journalists at a breaking of the fast meal.

"Bogasari is now under Indofood, later it will become an independent company. Then, we will invite new foreign investors (to acquire Bogasari)."

Eva said there were some foreign investors showing interest in Bogasari. However, she declined to name them.

Last month, Australia's wheat exporter, AWB Ltd., said it was interested in investing in Bogasari.

Eva did not rule out domestic investors' participation in Bogasari, the country's largest flour mill which once enjoyed a monopoly in the industry.

"If they want to, please," she said.

Eva indicated that the proceeds from Bogasari's sales would be used to repay the company's mounting debts.

"Our debts have been declining over time, and we are committed to servicing all of our debt obligations. We are confident that we will be able to pay all of our debts, and from this (spin off and sale of Bogasari) we will get fresh funds."

Indofood has about US$1 billion in debts, most of which is in U.S. dollars and repayable within five years.

The company hedged 43 percent of its foreign currency loans at the end of December.

Last week, the majority shareholder of Indofood, the Salim family, announced the sale of a 60 percent stake in the company, with half of the shares going to Hong Kong-based Salim subsidiary First Pacific Co. Ltd. and the other half going to Nissin Food Products Co. Ltd. of Japan.

Eva said that the transaction was valued $570 million. First Pacific would pay its half of the value with stock shares and the other half with cash, paid in installments through September 1999. Nissin would pay its half in cash on Feb. 1.

Following the sale, Eva said, Indofood president Sudwikatmono and vice president Anthony Salim would be replaced by appointees from First Pacific and Nissin.

All other members of the board of directors would be maintained, Eva added.

Anthony would then serve as a commissioner at the company, while all of the existing commissioners would be removed. They include Soedono Salim, founder of the Salim Group, Ibrahim Risjad, Aang Kunaefi, Tedy Djuhar, Benny S. Santoso and Putera Sampoerna.

The changes would be finalized at the company's extraordinary shareholders meeting slated for Jan. 25. (rid)