Guthrie plans to refinance bridging loan

28 Jun 2001 (NSTP)- DIVERSIFIED oil palm plantation group Kumpulan GuthrieBhd plans to replace its locally raised Al-Ijarah Al-Muntahiah Bit-Tamliksyndicated bridging loan of RM1.5 billion with a US$400 million (RM1.5billion) Sukuk Al-Ijarah (Global Islamic Bonds) refinancing.

Bank Islam (Labuan) Ltd will be the adviser to the fund raising. Thechange is expected to bring in international financiers to the deal.

The local Islamic bridging loan had been raised to finance the purchase ofHoldiko Palm Plantation whose estates are scattered throughout Sumatra,Kalimantan and Sulawesi in Indonesia, from the Indonesian BankRestructuring Agency (Ibra). These plantations were formerly owned by theSalim Group.

Local banks in the earlier syndicate included Bank Islam Malaysia Bhd,Malayan Banking Bhd, RHB Bank Bhd, Bumiputra Commerce Bhd, CommerceInternational Merchant Bankers Bhd, Bank Muamalat Malaysia Bhd and ABNAMRO Bank Bhd.

Speaking after the company's AGM and EGM in Kuala Lumpur yesterday,Guthrie group chief executive Tan Sri Abdul Khalid Ibrahim said: "We firstneed to conduct an EGM to approve the Indonesian acquisitions. Themajority shareholder, Permodalan Nasional Bhd has agreed to vote in favourof such a resolution.

"We are in the process of detailing the assets and resources we areacquiring for that EGM.

"And we have had discussions with an international bank to start therestructuring of our domestic Al-Ijarah Al-Muntahiah Bit-Tamlik syndicatedbridging loan. We will be raising about US$400 million Sukuk (bond)Al-Ijarah refinancing to replace the local borrowings." Abdul Khalid saidthe deal for the acquisition of the Holdiko Palm Plantation was settled onMarch 13 with a lump sum payment of US$368 million, and the question ofownership rights to the estates is no longer a major issue.

"The land was bought from the Ibra which guarantees ownership and in anyclaim by the local provinces, Guthrie would in turn have a right of claimfrom the Ibra.

"The mood of the local people is to continue with their lives and work inthe plantations, having managed these estates, selling crude palm oil(CPO) from these plantations for about two months," he added.

With the Indonesian acquisitions, Kumpulan Guthrie's plantations hasincreased from 110,000 hectares (in Malaysia) to over 300,000 hectares.

Abdul Khalid said that over the next three to four years, Kumpulan Guthrieis expected to reinvest more than US$150 million in terms of mills, estatehomes and infrastructure in Indonesia.

On the current financial year's outlook which he clarified will besubjected to the price of palm oil, he said: "Our expectation is if palmoil prices are higher than in the first half of this year, our forecast ofincome over the next six months would be better."