Indofood to change status to foreign firm

Indofood to change status to foreign firm

JAKARTA (JP): Shareholders of food giant PT Indofood Sukses
Makmur approved on Monday the sale of a majority stake to
overseas interests, changing its status into that of a foreign
investment company.

New company president Eva Riyanti Hutapea said, however, that
the extraordinary meeting failed to approve the company's
proposal to obtain technical assistance from Nissin Food Products
Ltd of Japan, one of its two new shareholders.

"The change in status is related to the takeover of the Salim
Group's 60 percent stake in Indofood by Nissin Food and First
Pacific," she said.

Nissin Food and Hong Kong-based First Pacific Co Ltd agreed
last month to purchase the 60 percent stake from controlling
shareholder, the Salim Group, for US$510 million -- slightly
lower than the previously reported US$570 million.

"Proceeds from the transaction will be used to pay bonds
issued by the Salim Group," she said.

Eva said though the company had changed its status, it would
still be committed to Indonesia. Besides, the Salim Group still
has stakes in Indofood through First Pacific.

Salim has directly and indirectly a controlling stake in First
Pacific, a company with interests ranging from marketing and
distribution to telecommunications, property and finance.

Analysts say the Indofood sale would give the company some
protection from a political drive to reduce the power of
Indonesia's large conglomerates, many of which, like Salim Group,
are owned by ethnic Chinese.

Eva pleaded that Salim's move to sell the majority stake in
Indofood should not be viewed as negative.

"I think there are a lot of Indonesian companies which are
inviting in foreign investors now, and that's exactly what
Indofood has done."

Eva added that the meeting also approved a major reshuffle in
the company's management and supervisory boards.

The meeting approved the appointment of Koki Ando, currently
president of Nissin Food Products, as the company's new chief
commissioner to replace Soedono Salim or Liem Sioe Liong and to
name Manuel V. Pangilinan, managing director of First Pacific as
Indofood's vice chief commissioner to replace Ibrahim Risjad.

The meeting endorsed the appointment of Momofuku Ando and
Hironori Sato of Nissin, Thomas Y.Yasuda and Ronald J. Brown of
First Pacific as members of the supervisory board.

The meeting also endorsed the appointment of Eva Riyanti
Hutapea, currently Indofood's vice president, as the new
president to replace Sudwikatmono and of Darryl J. Kineally and
Takayuki Naruto as new vice presidents, replacing Anthony Salim
and Eva Riyanti respectively.

"The new management team is to take effective at the beginning
of February," Eva said.

Although most of the agenda was approved, the meeting failed
to endorse the company's proposal for technical assistance from
Nissin.

Eva said a minority of shareholders representing 276.8 million
shares voted for the technical assistance proposal -- less than
the needed 50 percent -- compared to 140.5 million against.

"Based on regulations, this doesn't meet the minimum
requirement," she said.

Indofood has a 90 percent share of the domestic noodle market,
a virtually exclusive monopoly in wheat flour processing and a 60
percent domestic share in branded cooking oil.

Eva said that the company, which recorded a total net loss of
Rp 1.2 trillion in 1997, expected to book a net profit of around
Rp 150 billion in 1998.

"We are optimistic of performing better this year," she said,
declining to provide earnings targets. (aly)