INDOFOOD Agri Resources' joint ventures (JVs) have proposed reorganising and consolidating their sugar assets and operations in Brazil.

 

The joint ventures are Companhia Mineira de Aç ú car e Á lcool Participaç õ es (CMAA) and Caná polis Holding, the agribusiness group said in a bourse filing on Thursday. IndoAgri Brazil Participaç õ es, a wholly owned subsidiary by IndoAgri, owns stakes in both entities.

 

CMAA and Caná polis are looking to consolidate their sugar assets and mill operations under one legal structure - the former - in preparation for future expansion.

 

They also propose to combine the freehold land owned by CMAA and a wholly-owned subsidiary of Caná polis under a new entity to allow the group greater access to funding backed by the freehold land as collateral.

 

Together, CMAA and Caná polis have an annual cane crushing capacity of 8.8 million tonnes and own, in total, 9,374 hectares (ha) of freehold land, IndoAgri said.

 

CMAA has two wholly-owned subsidiaries called Vale do Tijuco Aç ú car e Á lcool (UVT) and Vale do Pontal Aç ú car e Etanol (UVP), which operate one mill each in Minas Gerais, Brazil, and own 2,481 ha and 1,012 ha of freehold land respectively.

 

Caná polis has two wholly-owned subsidiaries - Caná polis Aç ú car e Etanol (UCP) and Terra Forte Empreendimentos e Participaç õ es. UCP operates a sugar mill in Minas Gerais, while Terra Forte owns 5,881 ha of freehold land.

 

IndoAgri said the three mills owned by CMAA and Caná polis are in close proximity to each other, forming a " strong cluster" enabling operating and management synergies.

 

The segregation of the sugarcane mill operations and land ownership will be achieved by the transfer of the freehold land owned by UVT and UVP to CMAA, which will then transfer the land to Terra Forte.

 

CMAA will transfer all its shares in Terra Forte to Strebinger Participaç õ es, a newly incorporated entity.

 

If the proposed reorganisation is complete, IndoAgri Brazil will own a 36.21 per cent stake each in CMAA and Strebinger Participaç õ es. It currently has a 35 per cent stake in CMAA and a 50 per cent stake in Caná polis.

 

On Aug 27, PT Indofood Sukses Makmur Tbk (PT ISM) filed that it had acquired 859,300 shares of Indofood Agri Resources during the period of Aug 19 to 27, 2020.

 

Acquired for a consideration of S$259,737, the average price paid for the 859,300 shares was 29.01 cents per share.

 

PT ISM is a holding company of Indofood Singapore Holdings Pte Ltd (ISHPL) with an interest of approximately 83.84 per cent of the total number of issued shares in ISHPL.

 

The acquisition increased the total interest of PT ISM in Indofood Agri Resources from 82.94 per cent to 83.00 per cent. The preceding acquisitions saw PT ISM acquire 211,200 shares between Aug 5 to 18, 2020 at 29.13 cents per share and 871,000 shares of Indofood Agri Resources at an average price of 30.14 cents per share for the period of June 16, 2020 to Aug 4, 2020, excluding the blackout period on July 14 to 29, 2020.

 

On Aug 18, PT Indofood Sukses Makmur Tbk (PT ISM) filed that it had acquired 211,200 shares of Indofood Agri Resources during the period of Aug 5 to 18, 2020.

 

Acquired for a consideration of S$61,528, the average price paid of the 211,200 shares was 29.13 cents per share. PT ISM is a holding company of Indofood Singapore Holdings Pte Ltd (ISHPL) with an interest of approximately 83.84 per cent of the total number of issued shares in ISHPL.

 

The acquisition increased the total interest of PT ISM in Indofood Agri Resources from 82.92 per cent to 82.94 per cent.

 

The preceding acquisitions saw PT ISM acquiring 871,000 shares of Indofood Agri Resources at an average price of 30.14 cents per share during the period of June 16 to Aug 4, 2020, excluding the blackout period on July 14 to 29, 2020.

On Aug 4, PT Indofood Sukses Makmur Tbk (PT ISM) filed that it had acquired 871,000 shares of Indofood Agri Resources during the period of June 16, 2020 to Aug 4, 2020, excluding the blackout period on July 14, 2020 to July 29, 2020.

 

Acquired for a consideration of S$262,519, the average price of paid for the 871,000 shares was 30.14 cents per share.

 

PT ISM is a holding company of Indofood Singapore Holdings Pte Ltd (ISHPL) with an interest of approximately 83.84 per cent of the total number of issued shares in ISHPL.

 

The acquisition increased the total interest of PT ISM in Indofood Agri Resources from 82.86 per cent to 82.92 per cent. The preceding acquisitions saw PT ISM acquiring 11,881,800 shares of Indofood Agri Resources at an average price of 28.94 cents per share between March 17, 2020 and June 15, 2020.

 

On July 30, Indofood Agri Resources reported higher revenue and gross profit in H1FY20 (ended 30 June) despite challenging market conditions and Covid-19. The higher revenue and gross profit were mainly due to higher selling prices of palm and edible oils and fats (EOF) products.

 

Notwithstanding this, the group continued to report net loss in H1FY20. For the six-month period, the group reported a higher net loss of 575 billion rupiah (S$53.9 million) despite higher gross profit and higher joint venture results, as well as lower general and administrative expenses.

 

The company noted that this was largely due to loss arising from changes in fair value of biological assets.

 

This was a result of lower volume and a lower FFB price compared to December 2019, and a higher share of losses of associate companies and higher income tax expenses arising from deferred tax adjustments, a result of tax rate changes in Indonesia.

 

Key plantation strategies for Indofood Agri Resources in 2020 include: (i) the replanting of older palms in North Sumatra and Riau with higher yielding seed varieties and

 

(ii) the expansion of milling facilities - a target completion of a 45MT FFB/ hour mill in East Kalimantan in Q4FY20.

 

For its EOF segment, key strategies include:

 

(i) a competitive marketing strategy for Bimoli to maintain its leading brand position

 

(ii) continuing to capitalise on Delima as second brand in the more affordable segment

 

(iii) increased penetration of the premium Palmia Margarine with new and improved products and

 

(iv) incrementally increase capacity, to meet growing consumer demand in Indonesia.

Shares in IndoAgri have outperformed since minorities rebuffed offer, as parent group buys in the market and any new offer will have to satisfy stricter SGX rules

 

AT INDOFOOD Agri Resources' (IndoAgri) annual general meeting (AGM) scheduled for June 16, three of the four directors who recommended that minority investors accept the lowball privatisation offer from the company' s parent last year will be seeking re-election.

 

As a minority shareholder of IndoAgri, I am inclined to vote against the resolutions to re-elect them....

https://www.businesstimes.com.sg/companies-markets/indoagri-directors-who-recommended-lowball-privatisation-offer-to-seek-re-election