Salim cuts stake in HK's firm

Salim cuts stake in HK's firm

HONG KONG (Dow Jones): Indonesia's Salim Group has cut its stake in Hong Kong's First Pacific Co. to 26 percent from 31 percent, by transferring shares to a new holding company owned by the Indonesian government, the Salim Group said Wednesday.

The transfer is part of an agreement the Salim Group made to settle Rp 48 trillion in outstanding liabilities, according to a press release by First Pacific.

The liabilities include Rp 35 trillion for credit extended to PT Bank Central Asia, which the Indonesian government took over earlier this year.

The Salim Group also will transfer some Indonesian assets to the new holding company, which Salim will manage, the release said.

Indonesian investor groups, including the Salim Group, now hold 49 percent of First Pacific, down from 54 percent. As the Indonesian owners continue to be the largest shareholders, the share transfer won't affect First Pacific's operations, said Robert Sherbin, a First Pacific vice president.

The board of directors, however, may consider altering the board composition later, he said.