Indofood to sell Bogasari mill to strategic buyers

JAKARTA (JP): Shareholders of giant instant noodlemaker PT Indofood Sukses Makmur approved on Wednesday a management proposal to spin off its flour mill division PT Bogasari Flour Mills into four separate companies.

Company president Eva Riyanti Hutapea said the shareholder's approval would lead to the transfer of the Bogasari assets to Purply Holding BV, a Dutch-based holding company wholly owned by Indofood.

Eva said the transfer to the Dutch company's balance sheets was slated for early next year.

"When the transfer is complete we will then invite strategic investors to buy up to a 60 percent stake of the four separate companies," Eva said, adding that the move was to improve the company's cash balance and equity.

With total assets of Rp 3.4 trillion, PT Bogasari Flour has been split into four companies: PT Bogasari Sentra Flour Mills, with a 2.3 million ton per year capacity, PT Intisari Flour Mills with a 1.3 million ton per year capacity, flour bag manufacturer PT Inti Abadi Kemasindo with an annual capacity of 100 million bags and shipping company PT Indobahtera Era Sejahtera.

"There are more than 12 potential investors that have shown their interest and begun talks with us in regard to the purchase of Bogasari companies," Eva said.

Australian Wheat Boark Ltd. and Canada Bond Cargill Inc. are two of the investors currently interested in buying stakes in Bogasari companies.

Eva said that following the company's extraordinary shareholders meeting, the sale of shares in Bogasari companies would allow Indofood to concentrate on its core business of branded consumer products.

The company however said that the Bogasari divestment plan was subject to the approval of the Indonesian Investment Coordinating Board (BKPM) and the company's next extraordinary shareholders meeting, which is slated for early next year.

Indofood's shareholders also approved the appointment of new commissioners and one director, following a 40 percent purchase of the company's stake by Hong Kong-based conglomerate First Pacific Co.

The shareholders approved the appointments of First Pacific's Manuel Pangilinan as chairman of the board of commissioners, replacing Salim group chairman Sudono Salim -- who is also known as Liem Sioe Liong -- and Ibrahim Risjad as vice president- commissioner.

The shareholders also approved Salim Group's Anthoni Salim and First Pacific's Thomas Yasuda, Michael J.A. Healy and Darryl J. Kineally to sit as commissioners, replacing Aang Kunaefi, Putera Sampoerna, Benny Santoso, Tedy Djuhar and Herman Djuhar.

In addition, First Pacific's Edward Tortorici was announced as the new company director, with Eva Riyanti Hutapea, Franciscus Welirang, Cesar M. de la Cruz, Iwan Arisanto, Sri Dewi Subijanto, Indra Josepha, Gaotama Setiawan, Djoko Wibowo and Aswan Tukiaty retaining their respective posts as president director and directors.

First Pacific bought the Salim family's 40 percent share in Indofood for US$4621 million in late June.

The Salim family hold about 53 percent of First Pacific.

The sale was a move by the Salim family to restructure all their business activities in Indonesia following the economic crisis and the fall of former president Soeharto, a long time friend of the group's chairman Sudono Salim.

Indofood's current shareholders comprise Hong Kong-based First Pacific Co. Ltd. with 40 percent, the Salim Group with 10.1 percent and the investing public with 49.9 percent. (udi)