Home Investor Corner Shentonwire: Indonesia’s Indofood to Buy Indofood Agri Shares for US$289M

Shentonwire: Indonesia’s Indofood to Buy Indofood Agri Shares for US$289M

Shentonwire: Indonesia’s Indofood Sukses Makmur Offers to Buy Indofood Agri Shares worth US$289.23 M
Indonesia's food and bevarage producer PT Indofood.

JAKARTA (TheInsiderStories) – Indonesian food and beverage producer, PT Indofood Sukses Makmur Tbk (IDX:INDF) offered to acquire the remaining Singapore’ Indofood Agri Resources Ltd. shares worth of US$289.23 million or US$0.20 per share, it said in a filing to SGX on Wednesday (04/10). At present, there are at least 90 percent of Indofood Agri’ shares circulating on the SGX.

In its statement, the Salim Group subsidiary said that the purpose of the offer was to delisted Indofood Agri from SGX. With that, flexibility occurs in implementing strategic initiatives and changes in company operations.

Behind the issuer’ plan to buy the shares of a private entity, the financial performance was actually not as high as last year, which made investors busy releasing the shares of PT Indofood CBP Sukses Makmur Tbk (IDX:ICBP). Up to the closing of the stock trading at the end of March, INDF shares fell 5.07 percent to the level of Rp6,550 a share.

Last year, the company’ net profit only grew 0.24 percent to Rp4.17 trillion from the previous year Rp4.16 trillion.

In addition, the Indonesian Securities Rating Agency gave an ‘idAA+’ rating to INDF, which showed that there was still considerable pressure from competitors which made INDF unable to pocket the highest rating, ‘idAAA’.

This can be seen from the company’s total sales over the past 3 years, which only grew in the range of 5 percent y-o-y while the last 2 years net profit was relatively stagnant with growth of less than 0.5 percent.

Apart from not being able to attract more investors, the issuers have not been able to boost the company’s productivity.

The reason, which suppressed the company’s achievements in the past two years was its subsidiary in the palm oil, PT Salim Ivomas, that profits continued to decline, even last year recorded losses of up to Rp76.57 billion.

S$1 = US$ 0.74

Written by Daniel Deha, Email: daniel@theinsiderstories.com

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