New investor may help Lonsum restructure $260m in debt
New investor may help Lonsum restructure $260m in debt
Rendi A. Witular, The Jakarta Post, Jakarta
Publicly-listed plantation company PT PP London Sumatra
Indonesia (Lonsum) said on Monday that it was currently in talks
with a new investor on the company's plan to restructure its
US$260 million debt next year.
"There will be a new investor in the company, and there will
be a dilution of (some of) our shares. This is part of our
program to restructure our debt," said Wirawan Giriputra, the
company's general affairs director.
Wirawan said that Lonsum could not announce the identity of
the new investor yet, nor the amount of shares to be diluted,
because the company was still negotiating and the results would
be announced in early January.
As part of the restructuring program, the company also plans
to offer its creditors a debt-to-equity settlement and to issue
bonds in the first quarter of next year, amounting to around Rp
750 billion (US$88.2 million), Wirawan said.
He said, however, the company still expected to win approval
from its shareholders during an extraordinary shareholders
meeting, slated to take place in the first quarter of next year.
Lonsum, the country's second-largest publicly-listed
plantation company, expects its revenue to grow by around 20
percent next year, on the back of the higher price of crude palm
oil (CPO), rubber and tea.
Around 80 percent of the company's revenue in the first nine
months of this year was derived from the sales of CPO, 12.7
percent from rubber, 4.9 percent from cocoa and 2.47 percent from
other commodities, such as tea.
As for this year, the company said that its sales revenue was
expected to surge to around Rp 1.1 trillion, on the back of a 19
percent increase in the price of CPO and a 16 percent increase in
the price of rubber.
As of September, the company had booked a sales revenue of Rp
919 billion, up from Rp 770 billion in the same period of last
year. Its net profit, however, plunged to Rp 222 billion from Rp
455 billion due to an increase in taxes to Rp 104 billion, and
lower foreign-exchange gains.
On July 2, Lonsum had experienced a problem at its rubber
plantation in Bulukumba, South Sulawesi when a demonstration
carried out by nearby villagers turned ugly.
The villagers protested against decades of the alleged
occupation of their ancestral land by Lonsum. Police fired shots
to disperse the crowd, killing at least two villagers.
The National Commission on Human Rights (Komnas HAM) and the
National Police are still investigating the case, as human rights
violations have been reported.
Wirawan declined to talk much about the incident, saying only,
"The case has not affected Lonsum's operations."