Harrisons sells Indonesian arm

HARRISONS & Crosfield has sold its Indonesian plantation interests for dollars 273m ( pounds 180m), marking a further significant move by the company away from its historical roots into chemicals, building products and food.

The sale will net H&C a profit of pounds 114m, reducing its net borrowings, as at its last balance sheet date of 31 December, to pounds 91m or from 48 per cent to 14 per cent of shareholders' funds.

Lonsum, the plantation business, operates 19 estates in North Sumatra, East and West Java and South Sulawesi. In total 46,000 hectares are planted and the principal business is palm oil and rubber products.

Buyers are Persada, a group of Indonesian businessmen who approached H&C after the group said it was considering a flotation of 20 per cent of Lonsum.

Bill Turcan, chief executive, said strong palm oil prices had created favourable conditions for the sale. The price represented 14 times' Lonsum's historic earnings. Until the proceeds of the sale were reinvested there would be a marginal dilution of H&C's earnings of about 0.5p a share at current deposit rates.

Last year the operating profits of Lonsum were pounds 18.1m and at end December net assets were pounds 55.8m.

H&C still has a 57 per cent share in New Britain Palm Oil Development in Papua New Guinea. Mr Turcan said yesterday that this holding fitted in with the company's plans and was not for sale.

H&C began its move out of plantations with the partial sale of its Malaysian interest in 1982.