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."