Sampoerna to buy back 28m shares from Panamas

JAKARTA (JP): Shareholders of publicly listed cigarette producer PT Hanjaya Mandala Sampoerna agreed on Wednesday to buy back its 28 million shares worth Rp 336 billion (US$29.5 million) from its subsidiary PT Perusahaan Dagang dan Industri Panamas.

Sampoerna's outgoing finance director Ekadharmajanto Kasih said that the buyback would increase the shareholders earnings following a decrease in its total shares to 900 million from 928 million.

"The buyback will also make trading in the company's shares on the Jakarta Stock Exchange more active," he told reporters after the company's shareholders' meeting.

Its shares closed down 0.61 percent at Rp 16,350 on Wednesday.

Sampoerna issued the 28 million shares with a par value of Rp 500 per share in March, 1999 in exchange for $40 million in guaranteed notes bought by Credit Suisse First Boston (CSFB) from the former's subsidiary Sampoerna International Finance Company.

CSFB later sold the shares to Panamas.

Sampoerna will buy back the shares at the same price Panamas paid to CSFB, namely Rp 12,000 per share, Ekadharmajanto said, adding that the transaction would be completed within two days.

Aside from the buyback, the company's shareholders also approved the company's proposal to split its shares one to five, cutting the par value of each share to Rp 100 from Rp 500, he said, adding that the number of total shares would reach 4.5 billion after the stock split.

"The split will make Sampoerna shares on the JSX more affordable ... it will trigger more trading," Eka added.

However, he was reluctant to provide any further details as to when the stocksplit would be carried out.

The shareholders also agreed to appoint Putra Sampoerna's youngest son, the 23-year-old Michael Joseph Sampoerna, as the new president and director of finance, replacing his father.

Before, Michael was the marketing director at the company business unit.

Putra was named the new chief commissioner, replacing Boedi Sampoerna, who was appointed deputy chief commissioner.

Ekadharmajanto Kasih, the former finance director, was appointed as a new commissioner, while Phang Cheow Hock and James P. Barness, who were formerly commissioners, have been appointed independent commissioners.

The shareholders also agreed with the company plan to pay a dividend of Rp 350 per share for 2000. The dividend is to be paid in August.

Eka also announced that the company's plant in Manila, the Philippines, caught fire on Sunday, due to an electrical fault.

"The total loss is about $15 million but it's fully insured," he said, adding that the factory would be out of production for between three and six months.

Sampoerna's local factories are located in Malang, Surabaya, and Pasuruan, while its overseas plants are located in Malaysia, Myanmar, Vietnam, the Philippines and Brazil.(05)