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January 5, 2013

 

Indonesia—The Largest Shrimp Farm in the World
CP Prima Restructuring Its Debt



In September 2012, shareholders of PT Central Proteinaprima (CP Prima), the largest shrimp farm in the world, approved the company’s proposal to restructure $325 million worth of debt that its subsidiary Blue Ocean Resources defaulted on in 2007.  The debt, originally scheduled to mature in June 2012, will now mature in 2020.  If the courts approve the plan, principal payments will begin in 2017, at the rate of  $16.25 million every six months, with the remaining balance to be paid at maturity.  The original interest rate will be cut from 11% a year to 2% in 2013 and 2014.  Then it will be increased to 4% in 2015, 2016 and 2017, to 6% in 2018 and to 8% in 2019 and 2020.

 

In January 2013, parties involved with the debt restructuring reported that they hope to complete the restructuring agreement by May 2013.  CP Prima counsel Premier Law LLC said that representatives of the company have met with the lead bondholder and that there is good support for the proposed scheme.  The lawyer said Blue Ocean intends to apply for court permission to proceed with the restructuring between January and February 2013.  The Indonesia Stock Exchange (Bursa Efek Indonesia) had earlier reported that CP Prima needed to complete the restructuring by February 2013 or face delisting.

 

Background Information: The shrimp division of PT Central Proteinaprima (CP Prima), a subsidiary of Thailand’s Charoen Pokphand Group, markets broodstock and seedstock (both specific pathogen free and specific pathogen resistant), probiotics, medicines, chemicals, feeds, and processed shrimp products for export.  It has three huge shrimp farms on the east coast of the island of Sumatra: Central Pertiwi Bahari, Wahyu Mandira and Aruna Wijaya Sakti.

 

CP Prima markets six brands of shrimp feed: Irawan (for Penaeus vannamei); VIP, CP, Marine and Bintang (for P. monodon); and Scampi (for Macrobrachium rosenbergii).  It exports head-on and headless shrimp, along with a broad selection of value-added products.

 

CP Prima reported that its financial losses tripled from $70 million in 2010 to $233 million in 2011.  Total sales, however, grew 20.58% to $827 million, and shrimp sales increased from $251 million to $320 million.  CP Prima sold more than 520,000 metric tons of feed in 2011, up 12% from 2010.  Fish feed sales were $234 million and shrimp feed sales were $175.8 million.

 

Revenue growth aside, CP Prima was closing some farming operations and having trouble collecting money owed to it.  The closures led to disputes between the company and its shrimp farmers.  In 2011, it had to write down fixed assets by $59.9 million and make allowances for uncollectable debts of $97.4 million.

 

Sources: 1. Undercurrent News.  Editor, Tom Seaman (undercurrent@undercurrentnews.com>).  CP Prima Shareholders Approve Bond Restructure.  September 30, 2013. 2. Undercurrent News.  Editor, Tom Seaman (undercurrent@undercurrentnews.com).  CP Prima Sees Support For Restructuring Plan.  January 3, 2013.  3. Background Information.  News reports that appeared on the Shrimp News international Free News Page during 2012.

 

 

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