Sinar Mas woes stall acquisition deal
JAKARTA (JP): Publicly listed food producer PT Indofood Sukses Makmur said on Thursday its US$173 million plan to acquire the Singapore listed Golden Agri Resources had ran into a snag, partly due to financial troubles at the latter's holding company, the Sinar Mas Group.
Indofood president Eva Riyanti Hutapea said that lack of data on Golden Agri was stalling a due diligence process on the firm.
She stressed that Indofood would not acquire Golden Agri without conducting due diligence first.
"The due diligence process hasn't begun yet as we're still waiting for the complete data on Agri," Eva told The Jakarta Post.
Among the data that was still missing were the audited results on last year's financial statement of Golden Agri. Eva could not say why Golden Agri was slow in disclosing the information.
But when asked whether financial woes at the Sinar Mas Group played a part in the delay she said, "it's one of the reasons."
In May, Indofood said it had entered into a sales agreement with Sinar Mas for the purchase of Golden Agri.
Under the deal, Indofood will purchase up to 55 percent of Golden Agri's shares for a price of around $173 million.
Eva initially expected to finalize the deal with Golden Agri by August, and then seek Indofood's shareholders' approval.
However, a delay in the due diligence process may force Indofood to revise the timetable for the acquisition.
"The delay is testing my patience ... I'll wait until Aug. 10 at the latest, that's our walking-out date," she said, adding Indofood may walk out sooner than that.
According to her, Indofood would terminate its deal with Golden Agri if uncertainties over the acquisition still persisted.
That could happen, given the problems Sinar Mas has in disclosing the financial statements of its subsidiaries.
A unit of the group, the New York listed Asia Pulp & Paper (APP), has recently announced a debt standstill on servicing its debts worth some $13 billion to local and foreign creditors.
APP has been unable to disclose its financial reports, including those of its subsidiaries in Indonesia.
The company has instead promised to publish the audited financial statements for the year 2000 later this month.
Golden Agri, however, is not a unit of APP and belongs to the Sinar Mas food division under the Singapore-listed Asia Food & Properties Ltd (AFP).
Eva added that Indofood remained on the lookout for acquiring new oil palm plantations.
Eva was referring to market rumors that publicly listed PT Astra International planned to divest its oil palm plantation unit, PT Astra Agro Lestari, also listed on the Jakarta Stock Exchange.(bkm)