We are looking initially into the Bonds issuance, then possibly looking into the option of obtaining the bank loan" stated Finance Director of Sierad, Sik Wei Tjien, after the Annual General Meeting of Shareholders, yesterday.

The amount of obligation will probably greater than the working capital needed.  The proceeds from the bonds issue not only will be used to finance the working capital, but also for the investment, “We are still conducting feasibility studies to assess our business expansion plan”.

The source of the capital expenditure for the period 2007 will come from internal cash reserves.  The amount of capital expenditure for this year is Rp. 50 billion, which will be allocated for the partnership business development with small to medium enterprises (SME).

This project involving SME has successfully recruited 1,000 farmers as business partners and located in Java, with the composition of 50% in West Java, and the rest in Central Java and East Java.

"This partnership program supports the improvement of the welfare of the farmers in the region and supports other agricultural products"

In the meantime, he added that the company has the plan to conduct quasi reorganization to cover the deficit of the company amounting to Rp 2,7 trillion.  This deficit is the remaining of the total loan of US$313 million received from the bank prior to 1997.

"The company suffered from the loss of the foreign exchange translation.  Even though, our loan has been converted into shares, but we have to be able to cover our deficit in order to pay for the dividends for our shareholders next year”.

If the quasi reorganization is not able to cover the deficit of the company, the fund needed will come from the investors.  “If such quasi is not able to cover the deficit, the shareholders must provide for the additional paid-up capital", he said

The company admitted that it has discussed the plan for quasi reorganization with the Capital Market Supervisory Board.

In the regulation of Capital Market Supervisory Board Number IX.L.1 on the Procedure to Conduct Quasi Reorganization, it was stated that the quasi reorganization is the reorganization by conducting the revaluation of the assets and liabilities in its fair value and eliminating the negative loss amount.

The public company that conducts the quasi reorganization is the company that experienced material negative loss for three years consecutively.

This procedure shall receive prior approval from the shareholders, and the assets considered as relatively high in value must also be reduced.

Sierad targeted that this year sales will increase by 40% compare to the sales figure in 2006 of Rp. 1,1 trillion. The company also targeted that its net income increased by 50% compare to the same net income last year of Rp 41 billion.