UNITED Fiber Systems (Unifiber), the Singapore listed company that has emerged as the front-runner in the battle to acquire Indonesian pulp maker Kiani Kertas, is working to speed up the process, sources told BT.

　　A transfer of the sales & purchase agreement between Kingsclere Finance and Kiani to Unifiber is expected to be finalised this week. Once this is done, Unifiber will be able to negotiate directly with Kiani and its major creditor, Bank Mandiri.

　　Kingsclere signed a non-binding agreement to buy Kiani from its shareholders last December. The company had then indicated that it would sell the business to Unifiber.

　　The move by Unifiber to speed up the process comes as rumours emerged that the Sinar Mas group, Indonesia's largest pulp and paper maker, has indicated an interest in acquiring Kiani.

　　While there are no details on whether Sinar Mas has actually made a formal bid for Kiani, investment bankers told BT that they could move in if they see an opportunity.

　　'The Sinar Mas group has been eying Kiani Kertas for some time now,' said the head of an international investment bank.

　　'I don't think they have made an official approach but they sense an opportunity.'

　　The competition to acquire Kiani has been raised several notches since Putra Sampoerna, Indonesia's third richest man, made a formal bid for the pulp mill. Mr Sampoerna, however, said last week that he had ended talks with Bank Mandiri after negotiations broke down.

　　BT understands that Mr Sampoerna had agreed to put down a deposit of several hundred million dollars as an indication of his seriousness in acquiring Kiani, but the bank had asked for a bigger deposit.

　　The lender had also wanted to forfeit the deposit if the deal fell through.

　　Mr Sampoerna was yesterday quoted by Bloomberg as saying that he was still keen to buy Kiani if Bank Mandiri revises the sale terms. He noted that he was willing to give the bank and the biggest Kiani investor, Prabowo Subianto, 'reasonable' time to decide if they want him to buy the company.

　　'At the end of the day, it became clear to me we had an unwilling seller, or a seller that was not in a position to sell,' he said. 'Especially after the counter-offer by Mandiri, it became clear to me that we also had a reluctant creditor.'

　　Bank Mandiri, which earlier rejected Kingclere's offer, is now expected to meet representatives of Unifiber within the next few days to start negotiations. The bank is owed US$201 million by Kiani, which opened its plant in 1997.

　　Unifiber's position is strengthened by the fact that it already runs the Kiani mill and last year provided US$22 million for operations and interest payments on debt.

　　The payment was part of an agreement in July to keep the company running. The same month, Unifiber bought PT Succsani Smart Works, a company that had an agreement to run Kiani's operations.

　　The company told the Singapore stock exchange on Jan 12 that it had arranged funds to buy Kiani and pledged to pay off its debt in the first quarter.

《The Business Times》