NISP Astra Agro Lestari divests ownership in subsidiary (AALI, Rp20,100)

· Astra Agro Lestari sold 100% of its ownership in Surya Panen Subur, AAL’s subsidiary in Aceh. This transaction is worth US$27.33mn and AAL cited that SPS’ area of 3,000 ha could not meet AAL’s economic production scale. AAL aquired SPS in 2007 with acquisition value of Rp161.0bn.
· AAL added that the conditional sales and purchase agreement has been signed last month with the buyer, PT Agro Maju Raya and PT Hamparan Sawit Nusantara.
· The impact on AAL’s production is less significant assuming the area yields around 13,000 tons of CPO compared to AAL’s production target of 1mn tons.
· Currently, AALI is trading at 2011F PER of 16.1x and EV/EBITDA of 8.7x.