| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers I > Headlines for Indofood Sukses Makmur Tbk. > News item |
Indofood may appeal U.K. High Court ruling barring eurobond redemption
New York, Aug. 23 - PT Indofood Sukses Makmur Tbk. said it may appeal a U.K. High Court ruling that it does not have the right to redeem its $280 million of eurobonds due June 2007 at par.
The company said it is waiting for the court to release its reasons, expected in September, and after that will "consider all options, including the possibility of an appeal."
It added: "Indofood continues to be advised that it has a good case for arguing that it is entitled to redeem the notes."
The court proceedings began following the termination of the Indonesia-Mauritius tax treaty effective Jan. 1, 2005, a change that increased the withholding tax rate on the bonds.
Under the trust deed for the bonds, that change entitles the company to redeem the debt at par, Indofood believes. It also says it has two "strong opinions from eminent Queen's Counsel advising unequivocally that Indofood had a right to redeem, there being no reasonable measures available to avoid the increased withholding tax obligation."
As a "gesture of goodwill," Indofood offered to redeem the bonds at 102% of par, subject to approval by bondholders, or 101% of par if a second meeting had to be held. The first meeting did not achieve a quorum and had to be adjourned.
Meanwhile, Indofood also has a ruling from the Indonesian Tax Authority that it will no longer be allowed to benefit from a favorable tax rate.
Indofood noted that the various decisions, as they now stand, mean it will have to pay withholding tax of more than 10% but not have the right to redeem the bonds.
The Jakarta, Indonesia-based instant noodle maker also said that as of Aug. 22 it had bought back $124.333 million of the bonds.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.