(JAKARTA) Indonesia's Sampoerna family withdrew its bid to buy PT Kiani Kertas because it could not agree with the largest creditor of the pulp-maker on purchase terms. The withdrawal leaves Singapore's United Fiber System Ltd in the running to buy Kiani Kertas.

　　The Sampoerna family rejected a request by PT Bank Mandiri, the creditor, to 'reconsider its decision', Mandiri said in a statement to the Jakarta Stock Exchange yesterday.

　　The withdrawal may bring back Unifiber, whose bid was rejected by Bank Mandiri on Jan 6, into the reckoning. Bank Mandiri, Indonesia's largest lender, has been trying to find a buyer for the pulp company to recover the money it spent buying Kiani Kertas' debt in August 2002.

　　Kiani Kertas was previously controlled by Bob Hasan, then a prominent businessman and golf partner of former Indonesian president Suharto.

　　On Jan 8, the Sampoerna family raised its offer to buy Kiani Kertas to US$401 million, from US$370 million. It was willing to spend US$201 million in cash to pay off Kiani's debt at Mandiri, and US$200 million to buy Kiani shares.

　　Unifiber has not made a formal offer for Kiani Kertas. Instead, it has signed a letter of intent with Kingsclere Finance, the vehicle set up to acquire Kiani Kertas. The letter gives Unifiber the right to buy into Kiani Kertas after Kingsclere executes the 'exclusive sales and purchase agreement' it signed with the mill-owners, led by retired general Prabowo Subianto.

　　On Jan 12, Unifiber said it had arranged funds to buy Kiani. It added that it was in an advanced stage of negotiations with Kingsclere for the transfer of the agreement to Unifiber.

　　'This funding will provide UFS with a solid financial capacity to acquire PT Kiani Kertas as well as addressing the rights and interests of its creditors,' Unifiber chief executive Kishore Dass had said.

　　Mr Dass also reiterated that Unifiber was still pursuing the acquisition of PT Kiani Kertas, in spite of all its complications, because the facility would give Unifiber an operationally ready pulp mill and a new revenue stream.

　　'The acquisition will provide us a platform to realise our vision of becoming a world-class market pulp player in this region,' he said.

　　Built at a cost of US$1.2 billion, Kiani sits on 3,400 ha, supported by infrastructure including power and effluent plants and a water treatment plant. It can produce 525,000 tonnes of pulp a year.

　　It has been operating at more than 60 per cent capacity since late last year, when its management was taken over by Unifiber, after earlier coming to a standstill for lack of working capital. - Bloomberg

《The Business Times》