Shareholders of Indonesia-based palm oil company Triputra Agro Persada are said to be working with Citigroup to review their stake sale plan, three executives familiar with the development told DealStreetAsia.
Triputra Agro shareholders – Singapore-based PE firm Northstar Group, Singapore’s sovereign wealth fund GIC as well as the company’s owner PT Triputra Investindo Arya (Triputra Group) – were reportedly exploring sale options late last year, per a report in Bloomberg in December 2018. The stake sale options also included an initial public offering (IPO) option with the deal value estimated to reach $1 billion, the report had mentioned at that time.
Private equity shareholders Northstar Group and GIC had invested around $200 million in Triputra Agro for an undisclosed minority stake in August 2012, per a Financial Times report. The two investment firms had an option to invest an additional $50 million in a few months after the first investment.
Northstar, together with GIC, holds around 30 per cent while the majority stake is still owned by Triputra Group’s founder Theodore (Teddy) Permadi Rachmat, said one of the executives mentioned above. Teddy Rachmat is also the father-in-law of Patrick Waluyo, Northstar Group co-founder.
Although the stake sale plan has been in the works since the end of last year, the deal process has not launched officially and the shareholders are still conducting internal preparations. They are now ready for approaches from interested parties.
The deal process may be in for some challenges given the unfavourable environment surrounding the palm oil business, which has seen weakening of prices as well as a negative image due to its impact on the environment, one of the executives said.
Triputra Agro Persada currently has 170,000 hectares under cultivation across 27 estates throughout Indonesia. The company claims to follow the roundtable sustainable palm oil (RSPO) and Indonesia sustainable palm oil (ISPO) compliance, as mentioned in its website.
At the time of investments by Northstar and GIC in 2012, Triputra Agro Persada had 120,000 hectares under plantation, according to a media report. Following the investment by Northstar and GIC, Triputra Agro Persada also proposed to conduct a domestic IPO in 2015. However, that plan was shelved for undisclosed reasons.
DealStreetAsia has reached out to Triputra Agro Persada and Northstar Group for comments but has not received a response yet. Meanwhile, GIC and Citigroup spokespersons declined to comment.