PT Agro Indomas gets $25m loan from foreign banks

PT Agro Indomas gets $25m loan from foreign banks

JAKARTA (JP): PT Agro Indomas, an Indonesian-Malaysian oil
palm plantation joint venture with a Central Kalimantan
concession, signed a loan agreement of US$25.2 million with two
foreign banks on Friday.

The loans from Rabobank International of the Netherlands and
Commonwealth Development Corporation of the U.K. will finance an
ongoing $40 million plantation project.

The loans would carry average interest rate of 2.5 percent per
annum over the London Inter-Bank Offered Rates.

Agro Indomas has cultivated 7,000 hectares of the 12,000-hectare
concession and the loan will be used to plant on the remaining
area and to finance infrastructure development including roads,
drainage system, housing and storage, director Syarif Bastaman
said after the signing ceremony.

Agro Indomas, 70 percent owned by Shalimar Development Group
of Malaysia, also plans to build a crude palm oil processing mill
with production capacity of 60 metric tons per hour. Production
is scheduled to start in the first quarter of year 2000.

"Our lenders, who have spent a great sum of money on the
feasibility study prior to this financing venture since 1997,
never thought of backing down from their initial plan," Syarif
said.

"This signing comes after the lenders' long process of careful
decision making, as shown by their sending agriculture experts to
Argo's plantation every two weeks for some period."

The ceremony was held at Bandara Sheraton Hotel near
Soekarno-Hatta International Airport.

None of the banks' representatives were willing to discuss the
loan with reporters and they left Jakarta immediately after the
ceremony. (02)