CP Prima pushes blame on shrimp virus for bond hitch

 

 

Indonesia's embattled shrimp producer PT Central Proteinaprima (CP Prima) on Monday (Jan 11) blamed a virus outbreak as the main reason for failing to meet a bond interest payment that was due in December.

 

In a statement to the Indonesia Stock Exchange (IDX), CP Prima said the virus attack meant it was unable to meet the December 28 coupon payment on the US$325 million in senior notes issued by its subsidiary, Blue Ocean.

 

IDX said it was still planning to meet with the board of the world's largest shrimp producer to get a clearer picture of the problem.

 

Trading in CP Prima shares was suspended last week after Fitch Ratings and Moody's Investors Service downgraded the company's bond rating following the missed the payment.

 

In December, CP Prima president director Erwin Sutanto said the infectious myonecrosis virus had devastated the company's shrimp production. Harvest volumes plunged from 8,486 tonnes in January to 3,536 tonnes in September. Production at the company's main Central Pertiwi Bahari farm dove from 5,728 tonnes in January to below 433 tonnes in September.

 

The company's revenue declined by 14% to Rp5.2 trillion (US$551 million) in the nine months to September, while net profit tumbled 80% to Rp24 billion (US$2.61 million).

 

Albert said the company is trying to handle the problem by improving farm sanitation and developing shrimp that can resist viruses better.

 

IDX director Eddy Sugito said trading in CP Prima's shares would remain suspended until the exchange is satisfied with the company's explanation.

 

Before trading was suspended, CP Prima shares were changing hands at Rp60 (US$0.0065) each.

 

Prawn expert Mathew Briggs said the virus outbreak hit CP Prima's Central Pertiwi Bahari farm in March. He said that if the proper measures were taken, shrimp production at the affected farms could be raised again.

 

''After adopting enhanced standard operating procedures and other techniques to improve disease resistance, the affected shrimp farms should return to normal production,'' said Briggs earlier in November.

 

However, he added that there was a danger that similar diseases could hit the company's other shrimp farms this year.