Jakarta. Palm oil producer Eagle High Plantation has secured Rp 1.54 trillion ($116 million) in loans from Bank Negara Indonesia to help fund expansion of its subsidiaries, the company said in a statement on Friday (09/09).
Eagle High, controlled by Indonesian tycoon Peter Sondakh and Malaysia's state-owned Felda Global Ventures, signed the letter of undertaking – a deal in which a lender guarantees a client's payment obligation of a specified amount to a third party – on Friday.
Eagle High subsidiaries that are entitled to the loans are Mandiri Kapital Jaya, Multikarya Sawit Prima, Arrtu Agro Nusantara, Arrtu Borneo Perkebunan and Arrtu Plantation.
"The loan is to help refinance debts of palm oil plantations and develop plantations as well as palm oil plants of subsidiaries," Eagle High Plantation corporate secretary Rudy Suhendra said in the statement.
Eagle High previously spent about Rp 450 billion to develop two palm oil plants in West Kalimantan and Papua.
Both factories are being upgraded to increase their capacity to 90 tons of palm oil per hour from 45 tons previously. Production is expected to double to 2.8 million tons per year by 2017 from the current level.
Rudy said the company's reasons to expand into Papua is to fulfil demand for crude palm oil that has not been met maximally.