Napan Group acquires foreign plantation firm

JAKARTA (JP): PT Pan London Sumatra Plantation (PLSP), an affiliate of the Napan Group, acquired the North Sumatra plantation firm PT PP London Sumatra Indonesia (Lonsum) from Harrisons and Crosfield Holding BV for US$183.5 million yesterday.

The agreement on the acquisition was signed in a ceremony in Singapore yesterday, with Citicorp International Ltd., of the United States, as lead arranger, with the Singapore branch of Commerzbank AG of Germany and the Hong Kong branch of Rabobank Nederland as co-arrangers.

The arrangers provided PLSP with $183.5 million in loans for its working capital.

The acquisition facility is structured as a five-year amortizing term loan with the source of repayment from the cash flow of the acquired company.

"This financing structure is believed to be the first of its kind in Asia," Citicorp told The Jakarta Post yesterday.

Citicorp said the five-year acquisition facility was well received in the market and fully subscribed with 22 members in the management group.

The acquisition of Lonsum, one the largest foreign-owned plantation firms in North Sumatra, is considered to be a strategic move by the Napan Group, to enter the food-based industry. Napan Group is controlled by business tycoon Henry Pribadi.

The new shareholders said PLSP plans to expand the operation of its predecessor, Lonsum.

Lonsum currently manages over 56,000 hectares of land, comprising of 20 agricultural estates. The company is engaged in the cultivating, harvesting, processing and marketing of oil palm and rubber products and to a lesser extent cocoa, tea and coffee. (rid)