Jul. 16--Charoen Pokphand Foods (CPF) is acquiring a 32.41 percent stake of Taiwan's leading agro-industrial and food firm for 826 million baht, as part of its ambitious overseas business expansion.

The listed flagship subsidiary of the agribusiness giant Charoen Pokphand Group said yesterday that through its wholly owned investment arm CPF Investment Limited (CPFI), CPF would buy 75,194,164 shares of paid-up capital from five existing shareholders of Charoen Pokphand Enterprise (Taiwan) Co (CPE). The transaction would be completed in the current quarter.

Taipei-listed CPE is a leader in animal feed mills, meat processing and food processing in Taiwan, with total revenue of NT$13.07 billion and net profit of NT$211.74 million last year.

According to CPF's president and chief executive officer Adirek Sripratak, the investment in Taiwan will help expand income from CPF's overseas operations. In addition, CPF will utilise its experience to enhance the Taiwanese subsidiary's capability in processed food and swine businesses.

"CPF is confident its strategy to expand in high potential countries will enhance its business growth in the future. Our return this year on overseas operations should improve a lot and will be a major factor for net profit," said Mr. Adirek.

CPF's food business is expected to grow by 100 percent this year from 158.67 billion baht last year with a net profit of 3.12 billion.

CPF continues to expand in Turkey, India, Malaysia, Laos, the Philippines, England, China and Russia. It just opened its feed mill in Russia in May. Encouraged by healthy growth in the first quarter, it plans to invest 4.5 billion baht this year, including 2.5 billion in overseas expansion.

In a related development, CP Group yesterday reiterated it is a totally separate body from Central Proteinaprima (CP Prima), the world's largest shrimp producer based in Indonesia and is now involved in a legal battle with its overseas bondholders.

The dispute involves a group of international investors who bought a $200-million bond issue, and the banks who acted as the trustee and security agent for the debt.

The bonds were issued in 2007 by Red Dragon, controlled by the Chearavanont family.

The dispute pits the investors and banks against Red Dragon and three other firms controlled by the family through CP Group chairman Dhanin's elder brother Sumet, all of which own stakes in CP Prima.

The other three companies -- Regent Central International, Charm Easy and PT Surya Hidup Satwa (SHS) -- jointly supported Red Dragon's bonds by pledging their shares in CP Prima to back the issuance. Red Dragon and these companies together controlled 70.3 percent of CP Prima prior to the company's controversial bond issues.

The dispute escalated last year when the value of CP Prima's shares and bonds plunged.

Attempts to restructure the debt failed and bond holders ordered Bank of New York Mellon, the trustee, and PT Bank Danamon, the security agent, to transfer some of the shares held as collateral to the bondholders, sparking several lawsuits.

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