Shareholders' meeting okays Indofood's Rp1.55t acquisition

JAKARTA (JP): Publicly listed noodle maker PT Indofood Sukses Makmur (ISM) of the Salim Group obtained approval from its shareholders yesterday to buy 80 percent of the shares in each of its six sister companies for Rp 1.55 trillion (US$651.26 million).

The six companies are PT Salim Ivomas Pratama, PT Intiboga Sejahtera, PT Salim Oil Grains, PT Bitung Menado Oil Ltd, PT Argha Giri Perkasa and PT Indomarco Adi Pratama.

Shareholders approved the purchase at an extraordinary general meeting which was chaired by Salim Group's vice president, Anthony Salim, who is the son of the group's founder Soedono Salim.

Indofood's chief executive officer, Eva Riyanti Hutapea, said after the meeting the "acquisition will boost the growth of our earnings per share by 20 percent and of our net profits by 45 percent this year".

After the acquisitions Indofood expects this year's consolidated total sales to rise to more than Rp 5 trillion.

The acquired companies are expected to contribute about 36 percent of this.

Hutapea said the acquisitions would help Indofood, secure raw materials, expand its product range and improve its distribution networks.

Indofood is Indonesia's biggest noodle maker.

Salim Ivomas manages about 50,000 hectares of oil palm plantations and makes crude palm oil. Bitung Menado makes and exports refined and crude coconut oil. Salim Oil Grains trades internationally in edible oil products. Indomarco Adi distributes consumer goods. Intiboga Sejahtera makes edible oils from palm- oil and Argha Giri makes coconut oil.

Last year Indofood's total sales were worth Rp 2.82 trillion and its net earnings were Rp 351.3 billion.

Sampoerna

The extraordinary shareholders meeting, which had been canceled twice, also appointed Putera Sampoerna, chairman of the publicly-listed cigarette maker Sampoerna, as a member of Indofood's board of commissioners.

Sampoerna bought about 5.09 percent or 77.725 million shares of Indofood last month.

"Mr Putera is a highly reputable businessman and he has extensive experience in the distribution business. His presence in Indofood will be a boon for our performance," Hutapea said.

Shareholders also approved the issue of 305.20 million rights at Rp 3,300 each in a five-for-one rights issue to raise Rp 1.007 trillion for the acquisitions.

"We will finance the remaining Rp 543 billion with bank loans which will be arranged by Credit Suisse, First Boston and Chase Manhattan," Hutapea said.

About 91.12 percent of Indofood's shareholders, including 75.41 percent of independent shareholders, attended the meeting.

More than 97.75 percent of the shareholders present voted for the acquisitions.

Indocement

Indonesia's biggest cement maker and fellow Salim Group member, PT Indocement Tunggal Perkasa, has got shareholder approval for its proposal to buy 50.1 percent of PT Indofood's rights issue.

Indocement's executive director, Benny S. Santoso, said after the company's extraordinary shareholders meeting yesterday that the company would allocate Rp 413 billion to buy the rights.

"Around Rp 400 billion of this money will be derived from our deposits," he said.

Last year Indocement sold PT Bogasari Flour Mills to PT Indofood Sukses Makmur for Rp 1.6 trillion.

"The purchase of Indofood's rights shares will keep Indocement as the majority shareholder," he said. PT Indocement now holds 50.1 percent of PT Indofood.

Indocement had total net sales of Rp 4.27 trillion last year, up 8.4 percent from Rp 3.94 trillion in 1995. The company posted a Rp 551.5 billion net profit last year, up 15.9 percent from 1995's Rp 475.92 billion.

In 1996, the company's earnings per share was Rp 228 compared to Rp 197 the year before.

He said the company expected net revenue growth of 75 percent this year and earnings per share growth of about 20 percent. (09)

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