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PT Green Dragon Multi Agri (PT. GDAM) has rapidly become one of the most innovative agri-based companies in Indonesia. Established only in 2010, the company started out from the acquisition of an old run-down medium sized palm oil plantation located in remote part of West Sulawesi. Immediately aware of the need to differentiate and distance itself from the negative image of the palm oil industry and the adverse environmental impact it creates; the management of PT. GDAM made it a mission and strategic commitment to follow sustainable palm oil production program. This core value continues to be in focus throughout their business development and operations. The successfully implement a full and comprehensive range of policies, initiatives and action plans, all of which are complying to the highest level of business, social ethics as well as environmental practices and standards. The condition has reflected positively, gaining excellence in all core aspects of the companys business metrics for performance and growth. Within the short 10-year period, besides completing a full turnaround of its business, the company also greatly expanded its presence.

Starting from only owning a single palm oil plantation business, it has now become a fully diversified and integrated agri-based industrial entity. Its business now ranges from research & development, oil palm seed breeding, oil palm cultivation and milling, and include downstream business refining, branding and marketing of cooking oil, margarine, shortening and other palm oil derivative products. Worthy appreciation has been obtained from all stakeholders including positive acknowledgment from major consumers and environmental advocacy groups which are usually very critical to the palm oil industry. Recent developments in global trade relationship, ecological and environmental dynamics as well as the devastation of health and social economic conditions caused by ongoing COVID19 pandemic has put extreme pressure to PT. GDAM business. The landscape of the economy and business environment has tremendously changed within a single year of 2020. Such unpredictable and extreme conditions had required the companys management team to immediately reassess the companys entire business strategy. As leading innovator in the industry, it has decided to leverage its capability to further advance into the green energy business sphere to drive its future growth and fully adapting to the new normal. In line with its focus to resolve the environmental issues PT. DGAM is exploring further business prospects, and to specifically participate in the Indonesian governments program for renewable energy development. The company sees a great opportunity to enter green energy business and reinforce the companys eco-management capabilities, to effectively reduce its environmental impact and increase its operating efficiency. Benefiting from its extensive reach and networking not only within the industry, but also the environmental and scientific communities both local and international levels, the Research and Development unit PT. GDAM had obtained a great breakthrough. As recognition, the company have recently received support and financial sponsorship from the International Green Energy Consortium (IGEC) to host two important Pilot Projects on the use of new technologies in the form of independent Renewable Energy Project Grant. PT. GDAM management is greatly honored to receive the support and endorsement, indicating that the Pilot Projects will be attached to two of company Plantation optimizing projects in Sulawesi, namely at Project A at the Manorang Hijau Plantation (MRHP) and Project B the Maniang Hijau Plantation (MIHP). Scope of these two technologies is further detailed below introductory profiles to be used only for illustrative purposes.

Question

Corporate restructuring occurs when significant and major reorganization or changes to the companys legal, ownership, operational, or other structures is needed. It is proactively performed with the objective of making the company more profitable, or better organized in order to meet its present and future needs. The most common forms of corporate restructuring are Mergers, Leveraged Buy Outs/LBO and Divestitures. In this matter, PT. GDAM management have strong track record in expanding its business at an accelerated pace and may further continue with this strategy. Find the general theme of the management issues as well as matters raised as questions in the problem set in this test as a baseline of your analysis. Identify the types of corporate restructuring, that is most suitable for PT. GDAM condition? Relate your answer within the context and nature of its main business and products accordingly. You are free to create some further assumption to support your explanation such as motives, strategies and dimension. Provide citation of sources of theoretical references and concepts supporting your opinion and arguments.