Indofood to buy back all $143.7 million 10 3/8% notes on June 12

By Jennifer Chiou

New York, May 15 - PT Indofood Sukses Makmur Tbk's Indofood International Finance subsidiary said it will redeem its $143.702 million of 10 3/8% guaranteed notes due 2007 after its board reached an agreement with the trustee of the securities.

The notes will be redeemed at par on June 12. The company said it will also pay accrued interest up to the redemption date.

On April 6, the Jakarta, Indonesia-based instant noodle maker repurchased $86.213 million of the securities. The buyback was carried out on March 14, but only announced on April 6.

On Jan. 7, the company said it failed to get support for the early redemption of the notes at a premium, adding that it had previously failed to achieve a quorum at a meeting on Dec. 23.

As originally announced, Indofood said it believes it is entitled to exercise the tax call on the bonds following the termination of the tax treaty between Indonesia and Mauritius, effective Jan. 1. That change would increase the withholding tax imposed by Indonesia on payments to Mauritius residents to 20% from 10%.

But the company had added that the trustee for the notes, JPMorgan Chase Bank NA, London Branch, disagreed.

The two sides disagreed over whether there are "reasonable measures" the issuer can take to avoid the withholding, Indofood previously said.

As a result, Indofood proposed to redeem the bonds at a premium, a change that would require bondholder approval.

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