MAINBOARD-LISTED United Fiber System, whose shares were suspended on Friday afternoon, said yesterday its proposed acquisition of East Kalimantan pulp mill Kiani Kertas (KK) is on track.

Unifiber has also requested a resumption of trading in its shares today.

CEO Kishore Dass said Unifiber had to suspend trading because 'an article in a prominent Indonesian newspaper ... had given confusing and misleading information on our investment opportunity in Kiani Kertas'.

Unifiber signed a letter of intent in June to buy a majority stake in KK from Kingsclere Finance at a price to be determined after due diligence.

'The article had an overall impression that Unifiber's investment opportunity regarding Kiani Kertas had fallen through,' Mr Dass said. In fact, 'it is business as usual' and Unifiber is 'currently performing all the necessary due diligence review' on the mill, he said.

Unifiber told the Singapore Exchange yesterday that the Bisnis Indonesia article had said the 'effectiveness' of Unifiber's proposed acquisition of KK 'depends on the fund transfer of US$15 million from Unifiber to Nusantara Energy's account with Bank Mandiri'.

Unifiber told SGX it is not aware of such a condition, and reiterated its intention to acquire KK. It also said it is committed to the mill's management and operations.

'As far as Unifiber is concerned, our immediate priority is to get Kiani Kertas up and running by the end of this month, under the terms of our operational management agreement,' Mr Dass said. 'We have already secured wood supply for the mill and everything is on track.' Through subsidiary Succsani Smart Works, Unifiber entered into an agreement last month for the management of the mill and to receive proceeds from sales.

Earlier this month Unifiber secured the supply of one million tonnes of acacia mangium wood from Indonesian state-owned Inhutani II for use by KK.

The Bisnis Indonesia article also referred to a 'transfer of shares' in KK from Kingsclere Finance to Unifiber. Unifiber said the shares have not been transferred to it, that discussions on the proposed KK acquisition are ongoing and terms have not been finalised.

《The Business Times》