Indofood plans to sell Bogasari

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)