Indofood stake sale awaits approval
JAKARTA (JP): The sale of Salim Group's stake in publicly listed food maker PT Indofood Sukses Makmur to Hong Kong-based First Pacific Co. Ltd. is still waiting for the approval of creditors, Indofood's director said on Tuesday.
Chief executive officer Eva Riyanti Hutapea said the company was trying to get unanimous consent from the creditors.
"We are optimistic we can complete the whole deal before the first quarter of 2000," Eva said after the company's annual shareholders' meeting.
She said First Pacific has agreed to purchase 40 percent of Indofood from the Salim family for US$650 million, but the deal could not go ahead because it did not get approval from all Indofood's creditors.
In April, First Pacific, which is also controlled by the Salim family, and Nissin Foods failed in their bid to buy a 60 percent stake in Indofood, also because the deal was not approved by all creditors.
Nissin backed down from the plan, leaving First Pacific to proceed independently with the continued acquisition plan by targeting a 40 percent stake owned by the Salim family.
An agreement between First Pacific and the Salim family on the sale of the 40 percent stake has been reached.
According to Indofood's loan agreement, any change of the company ownership must first get approval from all its creditors.
Eva said that, despite the fact that the sale of its 40 percent stake had not been concluded, the Salim family had put another 12.5 percent of its shares up for sale.
"For the additional 12.5 percent we will soon conduct a road show overseas," Eva said.
The Salim family's total stake in Indofood stands at 62.66 percent, of which a total of 52 percent is now up for sale.
Bogasari
Eva said Indofood was planning to sell 40 percent to 60 percent of its $800 million to $1 billion stake in flour milling subsidiary "Bogasari" to strategic investors, who have expertise in the field, by the end of this year.
"We will first take the flour milling division out of Indofood's balance sheet into four independent entities, then sell part of Indofood's stake in each separate entity to strategic investors," Eva said.
"We will use the proceeds of this sale for debt repayment," she said.
She said Indofood's total debts amounted to $900 million, of which $195 million would mature this year, $380 million next year, $125 million in 2001 and the remaining $200 million in 2002.
Eva said that about $135 million of the company's debts due this year had already been repaid.
Indofood recorded a Rp 153 billion net income in the first quarter of 1999, compared to Rp 28 billion in the same period of 1998.
In 1998 the company made a net income of Rp 150 billion, recovering from the previous year's net loss of Rp 1.19 trillion
Indofood shareholders approved the management's proposal to forego dividend payments for the 1998 financial year, because the net profit for that year still could not cover the loss in 1997, Eva said. (udi)