Singapore group to shell stake in Indorayon

Singapore group to shell stake in Indorayon

JAKARTA (JP): Shareholders of the Singapore-registered Asia
Pacific Resources International Holdings Ltd. (APRIL) have voted
to divest the group's 62 percent stake in the publicly listed
pulp and rayon producer PT Inti Indorayon Utama.

In a statement made available to The Jakarta Post on Tuesday,
Indorayon said the Tanoto family would retain a controlling stake
in the widely criticized company.

The Tanoto family formerly controlled Indorayon through their
controlling stake in APRIL. The divestment will leave them with a
majority 51 percent stake in Indorayon, the statement said.

The statement said that Indorayon common stocks held by APRIL
would be distributed among investors that held shares in the
Singapore-registered company by Jan. 18 of this year.

Investors will be given 85.39 Indorayon shares for every 100
shares they hold in APRIL.

Indorayon said the changes would allow both firms to focus on
core business activities.

The fractional share interest will be paid on Feb. 15 based on
the closing price of Indorayon shares on the Jakarta Stock
Exchange.

Indorayon stock price on the exchange dropped by Rp 50 on
Tuesday to close at Rp 400 on 978,000 shares traded.

Once the shares have been divested, Indorayon will become an
independent, publicly-listed company.

Indorayon manufactures pulp, dissolving pulp and rayon fiber
at its plant in Indonesia and rayon fiber at its plant in
Indonesia and Finland.

The company has the capacity to produce 240,000 tons of pulp
and 125,000 tons of rayon fiber annually.

Environmentalists have lambasted the company for damaging the
environment around its plant in Porsea, North Sumatra.

Acting on these accusations, the government closed the plant
for almost three months last year, although it was allowed to
restart operations in December to prepare for an independent
audit. The auditors will seek to establish if Indorayon has
caused excessive damage to the environment in North Sumatra.

Speaking during a hearing with the North Sumatra provincial
legislature in Medan on Monday, company president Herbun Darlin
said Indorayon had lost US$32 million in export revenue over the
past four months.

Herbun denied accusations that the company had deforested
massive areas of North Sumatra. He claimed Indorayon had
replanted 43,252 hectares of forest, leaving only 26,814 hectares
of denuded land for which the company could be held responsible.

Indorayon holds the right to harvest timber in 269,060
hectares of forest in the regencies of Dairi, Simalungun, North
Tapanuli and South Tapanuli in North Sumatra.

During the hearing, Herbun asked legislators when an audit of
Indorayon's operations would commence and said the current delays
had left his company facing an uncertain future.

Deputy Speaker Aminullah Purba said the legislature would send
an official letter to the North Sumatra governor asking when the
audit would start.

"We hope the audit will take place soon," he added.
(aly/21/02)