MARKET DEVELOPMENT
Bakrie Sumatra Plantation Sales Set for October
Bakrie Sumatra Plantation Sales Set for October
09/07/2013 (Jakarta Globe) - Bakrie Sumatera Plantation, a unit of the Bakrie Group conglomerate, expects to finish the sales of its six plantations within four months to help pay debt.
“The sales of the plantations are in progress and will be closed in October,”B. Chandra Sekaran, finance director of Bakrie Sumatera, told reporters after a meeting of the company’s shareholders Monday.
In a note on the company’s annual report to the Indonesia Stock Exchange (IDX) filed on June 12, the company said six palm plantation companies controlled through Agri International Resources had each signed an agreement with third parties to sell their assets.
In addition to agreeing to sell the land, the six companies also signed sales purchase agreements for the lands’ cultivation rights. The note also said that the six subsidiaries received an advance payment of $29.61 million for the land and $9.86 million for the cultivation rights.
Sekaran refused to disclose the value Bakrie Sumatera will get from the asset sales. He said that the six companies control a combined plantation area of more than 30,000 hectares located in various parts of Sumatra.
Sekaran said that company plans to use the proceeds to help pay off debt. According to the company’s financial report, Bakrie Sumatera had short-term liabilities amounting to Rp 3 trillion ($300 million) at the end of 2012 and Rp 8.07 trillion in long-term debt.
Meanwhile, the company posted a Rp 1.07 trillion net loss last year.
By letting go of the land, the company expects to recover from losses last year and turn a profit despite expectations of lower production volume.
“The bottom line should be better because the plantations we are selling are those with high capital costs,” he said, adding the six plantations contributed only about 15 percent of the company’s total crude palm oil sales, out of Rp 1.80 trillion last year.
Palm oil plantations account for roughly 61 percent of the company’s total business, while 27 percent comes from rubber and 12 percent from oleochemical, a product derived from palm oil.
Newly appointed president director Iqbal Zainuddin said the company is looking for partners for its oleochemical production unit.
“We are looking for a partner to operate the factories. We can focus on raw material and production, but to market product we need partners,” he said.
Iqbal declined to offer further details.
Shares of Bakrie Sumatera traded 3.8 percent lower to Rp 51 per share on Monday.
“The sales of the plantations are in progress and will be closed in October,”B. Chandra Sekaran, finance director of Bakrie Sumatera, told reporters after a meeting of the company’s shareholders Monday.
In a note on the company’s annual report to the Indonesia Stock Exchange (IDX) filed on June 12, the company said six palm plantation companies controlled through Agri International Resources had each signed an agreement with third parties to sell their assets.
In addition to agreeing to sell the land, the six companies also signed sales purchase agreements for the lands’ cultivation rights. The note also said that the six subsidiaries received an advance payment of $29.61 million for the land and $9.86 million for the cultivation rights.
Sekaran refused to disclose the value Bakrie Sumatera will get from the asset sales. He said that the six companies control a combined plantation area of more than 30,000 hectares located in various parts of Sumatra.
Sekaran said that company plans to use the proceeds to help pay off debt. According to the company’s financial report, Bakrie Sumatera had short-term liabilities amounting to Rp 3 trillion ($300 million) at the end of 2012 and Rp 8.07 trillion in long-term debt.
Meanwhile, the company posted a Rp 1.07 trillion net loss last year.
By letting go of the land, the company expects to recover from losses last year and turn a profit despite expectations of lower production volume.
“The bottom line should be better because the plantations we are selling are those with high capital costs,” he said, adding the six plantations contributed only about 15 percent of the company’s total crude palm oil sales, out of Rp 1.80 trillion last year.
Palm oil plantations account for roughly 61 percent of the company’s total business, while 27 percent comes from rubber and 12 percent from oleochemical, a product derived from palm oil.
Newly appointed president director Iqbal Zainuddin said the company is looking for partners for its oleochemical production unit.
“We are looking for a partner to operate the factories. We can focus on raw material and production, but to market product we need partners,” he said.
Iqbal declined to offer further details.
Shares of Bakrie Sumatera traded 3.8 percent lower to Rp 51 per share on Monday.