Officials have mixed reactions to Salim's plan
Officials have mixed reactions to Salim's plan
JAKARTA (JP): Officials gave mixed reactions yesterday to the
Salim Group's plan to sell giant PT Indofood Sukses Makmur to
tiny QAF Ltd incorporated in Singapore.
The Investment Coordinating Board's deputy chairman, Sugihono
Kadarisman, said Salim's internal acquisition plan was legal and
could even improve its international reputation.
"That's legal, just like state-owned firms selling their
shares overseas," Sugihono announced after attending a workshop
for provincial coordinating investment board officials.
"In this globalization era, Indonesian companies should
improve their competitiveness. If there is an Indonesian firm
selling its shares abroad, ... we must see it from our national
interests," he added.
He contended that a company selling shares overseas would have
more standing in the eyes of its business partners.
Sharing Sugihono's position, Minister of Cooperatives and
Small Enterprises Subiakto Tjakrawerdaya said he saw no problem
with the planned internal acquisition.
He said Indofood should still maintain its partnership with
local small firms and cooperatives.
"The case will not change Indofood's partnership program,
especially with village cooperative units which supply it with
agricultural commodities, even though its holding company may
move to Singapore," Subiakto said.
But Coordinating Minister for Production and Distribution
Hartarto declined to comment on Salim's planned restructuring.
"I will comment on it at the right time because it is a
sensitive issue ... we need a coordination (meeting) to decide
what is best," Hartarto said.
Salim group's PT Indocement Tunggal Prakarsa has proposed a
spin-off and sale of its 50.1 percent share in Indofood.
Under the proposed spin-off, Indocement would give most of its
Indofood shares to existing shareholders as a special dividend
and sell the remaining shares to the Sampoerna family, which
currently has a 5.63 percent stake in the food giant.
After that, QAF would buy the Salim Group's 45 percent stake
in Indofood through PT Marga, in addition to the Indofood stake
it would buy directly from the Sampoerna family.
This would give the Singaporean company a 50.1 percent stake
in Indofood. QAF, 70 percent owned by the Salim Group, would
issue right shares to fund the complicated acquisition.
Indocement president Sudwikatmono said yesterday that the
planned sale of Indofood to QAF did not represent capital flight
but capital flow.
"The funds will be 'parked' only temporary there. That's
normal in business," Sudwikatmono said after attending a
Children's Day celebration here.
He said Indofood would benefit from the planned restructuring
as it would easily market its products to Singapore and other
Asian countries.
Both Indocement and Indofood are listed on Jakarta and
Surabaya stock markets, while QAF is listed on the Singapore
Stock Exchange. (08/rid)