Indofood takeover plan halted

JAKARTA (JP): Publicly listed food giant PT Indofood Sukses Makmur has decided to postpone its plan to acquire an affiliated noodle plant in Saudi Arabia to avoid breaching the capital market regulations.

The company said in a statement that it had to delay the planned purchase of noodle plant Pinehill Arabia Food Ltd., owned by Indofood's controlling shareholder Salim Group, as Indofood was not prepared to comply with the capital market watch dog's (Bapepam's) regulations on internal acquisition.

The regulation, among other things, requires that a company planning to undertake an internal acquisition first has to get approval from the minority shareholders.

Indofood initially planned to use part of the proceeds from its Rp 1 trillion bond issuance to finance the Rp 250 billion acquisition. But the chief executive, Eva Riyanti Hutapea, later said the company would finance the acquisition with bank loans.

The bonds, which will mature in 2005, will be launched later this month, carrying fixed coupon rates ranging from 15.75 percent to 16.25 percent per annum.

The bonds received a double A rating with a stable outlook from rating agency PT Pefindo.

Indofood controls over 80 percent of the domestic noodle market. (udi)