12/06/2009 (The Jakarta Globe) - Palm oil producer PT Gozco Plantation has delayed an Rp 500 billion ($49.5 million) bond issue amid regulatory concerns over the size of the transaction in relation to the company’s revenue and total capital, an executive said.

The delay could cause the company to seek alternative financing, Gozco’s president director, Tjandra Mindharta Gozali, said in a statement published on the Indonesia Stock Exchange’s Web site on Friday.

Gozco had scheduled an extraordinary general meeting for Friday to seek shareholder approval for the acquisition of PT Palma Sejahtera, which was to have been financed through the bond issue.

However, the Capital Market and Financial Institutions Supervisory Agency, or Bapepam-LK, requested that Gozco postpone the meeting over questions about whether the size of the bond issue exceeded market limits. According to market rules, such a transaction cannot exceed 10 percent of a company’s revenue or 20 percent of its capital.

“We had scheduled the [meeting] for June 12, but given Bapepam’s request we have rescheduled it to June 25,” Tjandra said in the prepared statement.

The postponement will delay Bapepam’s approval for the bond issue, which was previously targeted for before the end of June.

“Considering that the presidential election will take place in the second half of 2009, while awaiting the shareholders meeting and looking at the external situation, we are now considering whether alternative financing might benefit the company more,” he said.

Tjandra said late last month that the company’s forecast of Rp 500 billion in revenue and Rp 150 billion in net profit this year was partly based on the Palma Sejahtera acquisition. He said that because of the delay in securing approval, Gozco might have to use its 2009 financial reports as the basis for the bond-issue proposal to Bapepam instead.

The company has an ongoing dispute with PT Sumber Terang over the voiding of an agreement to establish a joint-venture company, PT Sumber Terang Agro Lestari, in which Gozco was to hold 60 percent and Sumber Terang the rest. On Oct. 8, Gozco filed a criminal complaint in Palembang against Sumber Terang over the dispute.

Gozco’s shares closed down 1.6 percent at Rp 185 in Jakarta on Friday.