Sinar Mas, Bakrie Look To Take Big Bite Out of Domba Mas

By webadmin on 10:09 pm Sep 02, 2009
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Janeman Latul

Two of the country’s largest conglomerates, Sinar Mas and the Bakrie group, are competing to acquire holdings and debts from the ailing Domba Mas group worth as much as Rp 8 trillion ($800 million), various sources confirmed on Wednesday.

“Bakrie group will try to acquire the Domba Mas assets through [palm oil producer] PT Bakrie Sumatra Plantations,” said a person familiar with the matter. “The company is currently discussing the possibility with several Domba Mas creditors, including Bank Mandiri.”

“Sinar Mas has also been talking to Domba Mas creditors in order to acquire the assets,” said another source, who declined to be named.

Dombma Mas, owned by tycoon Susanto Lim, specializes in oleochemicals and palm oil products.

Despite last year’s boom market for crude palm oil, Domba Mas defaulted on Rp 3.3 trillion in debt to the country’s biggest lender, PT Bank Mandiri. The bank is currently planning to sell several of Dombma Mas’s holdings and liabilities.

One of the company’s most prized properties is an oleochemicals plant in Kuala Tanjung, North Sumatera.

Oleochemicals are derived from biological oils or fats and are used to produce biodiesel as well as cosmetics.

In 2005, Domba Mas agreed to sell US-based consumer goods giant Procter & Gamble 200,000 tons of oleochemicals annually over the next 10 years in a deal worth $1 billion. It is unclear whether this contract is still valid.

Mandiri also plans to sell other company assets, including hotels in Jakarta and Medan.

Abdul Rahman, Mandiri’s director, would not confirm Sinar Mas’s and Bakrie’s possible involvement in the matter.

“All I can say is that we’re still negotiating the sales of Domba Mas’s assets with interested investors,” Abdul told the Jakarta Globe. “I can’t mention details, including sales targets.”

Ambono Janurianto, Bakrie Sumatera’s president director, told newspaper Bisnes Indonesia on Tuesday that the company was interested in Domba Mas’s holdings.

“Who wouldn’t consider assets like that?”

Negotiations were still in the early stages, Ambono said.

Sulistiyanto, Sinar Mas’ managing director, declined to comment on the matter.