Pan Lonsum issues bonds worth $25 million

Pan Lonsum issues bonds worth $25 million

JAKARTA (JP): PT Pan London Sumatra Plantation (Pan Lonsum),
owned by Andry Pribadi of Napan Group, Ibrahim Risjad of
Risjadson Group and Henry Liem, announced yesterday that it has
issued mandatory exchangeable bonds worth US$25 million.

"Prudential Asset Management Asia Limited (Pama) of the United
States and Suez Asia of France have invested $20 million and $5
million respectively through the subscription of the bonds due
1999," president of Pan Lonsum, Ibrahim Risjad, said.

Ibrahim said that Pan Lonsum's subsidiary -- PT Perusahaan
Perkebunan London Sumatra Indonesia (PPLSI) which was acquired
from Harrisons and Crosfield Holding BV -- will also float its
shares in February.

"The bonds are exchangeable into PPLSI shares upon its listing
on the Jakarta Stock Exchange next year," said Ibrahim.

Pan Lonsum acquired PPLSI, which operates a 56,000-hectare
plantation in Sumatra, and its marketing arm in Singapore for
US$273 million last year.

Ibrahim said that the proceeds of the bond issuance and the
planned share public offering will be allocated to partly repay a
substantial portion of Pan Lonsum's bank borrowing incurred for
the acquisition of PPLSI and further business expansion.

Pan Lonsum acquired PPLSI, which was set up by Harrisons &
Crosfield in 1902, due to the expiry of its plantation operation
permit.

"We acquired the management of PPLSI, not its assets," said
Ibrahim.

Pama, the bond buyer, is the Asian investment and merchant
banking arm of the Prudential Insurance Company of the United
States, with its offices in Hong Kong, Singapore, Tokyo, Bangkok,
Taipei, Kuala Lumpur and Jakarta.

Since its establishment here in 1993, Pama has made
investments in several firms, including PT Siba Surya, PT Supra
Usadhatama and PT Bakrie Investindo.

Suez Asia is a subsidiary of the Suez Group and dedicated to
direct investment in Asia. Suez Group has offices in Singapore
and Hong Kong.

"PPLSI, which produces rubber, cocoa, tea, coffee and palm
oil, has established relationships with major customers in Asia,
Europe and North America," said Pan Losum's director Andry
Pribadi, who added that over 90 percent of its products are
exported.

Andry said PPLSI also operates 15 crop processing facilities,
including palm oil mills, sheet rubber and rubber chip factories,
cocoa processors and tea and coffee plants.

President of PPLSI, Geoffrey Brown, said the company is also
undertaking an expansion project in Palembang, South Sumatra, to
develop palm oil and rubber plantations in a total area of 32,000
hectares.

Brown said that the company's net profit last year was
recorded at Rp 39.3 billion ($17.2 million) from its sales
revenues of Rp 141.7 billion.

Sales are expected to increase to Rp 185 billion and the
profit to Rp 60 billion this year, he said.(kod)