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 Guthrie presses ahead with Indon estate deal

Thursday, February 22, 2001 - Kumpulan Guthrie Bhd will proceed with itsUS$350mil (RM1.33bil) deal to purchase 25 oil palm plantations inIndonesia from the Indonesian Bank Restructuring Agency (Ibra) despiteprotests by residents claiming ownership over parts of the land to besold.Guthrie chief executive officer Tan Sri Abdul Khalid Ibrahim said therehad been no communication from Ibra about renegotiation of the deal asreported recently."We have not heard anything from Ibra on the issue,'' he told reporters onthe sidelines of the Kuala Lumpur International Summit on Islamic Banking& Finance yesterday.A foreign report had on Tuesday quoted Thomas Lembong, a division head atIbra, as saying the deal would be renegotiated to arrive at an agreementmore acceptable to the residents.The plantations, covering 260,000ha and spanning provinces in Sumatra,Kalimantan and Sulawesi, were previously owned by the debt-laden Salimgroup. They were taken over by Ibra in return for a 53 trillion rupiah(RM1.92bil) bailout of the group's PT Bank Central Asia.Khalid, who appeared confident that the ownership claim would be resolved,said it was not a major issue to Guthrie, which has been involved inIndonesia's plantation sector for the last four to five years."Land is a sensitive matter and we have to take care of the locals. We arecapable of handling it. The current problem in Indonesia will not be aproblem for Guthrie and Ibra,'' he said.Contrary to claims that the plantation land had been sold to Guthrie atfire-sale prices, Khalid said Guthrie had beaten other overseas bidders tothe deal owing to its attractive offer price and overall packaging.To win the support of the Indonesian authorities, Khalid had structuredthe deal to include the listing of Holdiko Palm Plantations (HPP), theholding company for the 25 plantations, on the Jakarta Stock Exchange. Upto 10% of the shares in the intended public offering are to be reservedfor employees of HPP and Indonesia's Permodalan Nasional Madani, theequivalent of Permodalan Nasional Bhd (PNB).Khalid, the former chief executive of PNB, had helped to set up PermodalanNasional Madani.He said the acquisition of the Indonesian plantations would help reducethe group's production costs, which now stood at about RM650 per tonne.The production cost in Indonesia is about RM200 a tonne.(The Star)



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