Bumitama Agri to be compensated about 400b rupiah for plantation land
BUMITAMA Agri could potentially be compensated 400 billion rupiah (S$42.37 million) for 4,810 hectares of plantation land assets in Indonesia, to net a gain of 21 billion rupiah.
Back in 2012, the company was told that this land, belonging to its subsidiary PT Hatiprima Agro (HPA), had had its location permit revoked because the area had been redesignated as non-forestry area by the Indonesian Ministry of Forestry in 2011.
After a series of appeals and judgments, the High Court in 2013 ruled in favour of HPA regarding the land. One of the remedial options open to HPA was to seek to restore its investments by negotiating with the new owner.
Bumitama took the view that this would be the most efficient option, and launched negotiations leading to Friday's agreement with the new owner of the land, PT Langgeng Makmur Sejahtera (LMS).
Under the agreement, HPA will transfer the assets to LMS for a compensation payment. The exact terms of payment will be negotiated further, as the valuation of the assets is currently being conducted by an independent appraiser.
But the company estimates that the compensation sum will be about 400 billion rupiah, which would represent a gain of 21 billion rupiah over the land's book value of 379 billion rupiah.
Based on this amount, the transfer of assets would have no material impact on the net tangible assets and earnings per share of the company for the financial year ended Dec 31, 2014, Bumitama said.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Wall Street Journal moves Asia headquarters from Hong Kong to Singapore
Macquarie sees biggest profit dip in 15 years on commodities downturn
HSBC appoints ex-Citi banker as new Singapore head of global banking
H2G Green chief to stand trial on Aug 5 amid MOM probe
Dasin Retail Trust’s trustee-manager chairman, directors deny allegations of misconduct
Microsoft adds security chiefs to product groups in wake of hacking woes