Indofood stake sale awaits approval

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)