Regent Pacific Private Equity - an arm of listed fund management firm Regent Pacific - yesterday said it had agreed to take a 5 per cent stake in Indonesian tapioca manufacturer, Budi Acid Jaya. In a statement, Regent Pacific said it would be investing 35 billion rupiah (about HK$35.66 million) in Budi Acid in a debt for new equity exchange. This deal represents the first time an Indonesian company has used a newly introduced capital markets regulation that allows listed companies to issue new shares without having to make a full rights issue to all shareholders. Through the deal's structure, the proceeds will go towards paying off some of Budi Acid's debts. The deal prices Budi Acid at 2,800 rupiah per share, with Regent Pacific set to receive 12.5 million new shares. Regent Pacific said Buji Acid was the world's largest integrated manufacturer of tapioca starch and its by-products, including citric acid. The investment is to be made under Regent Pacific's Asian Opportunity Fund, which recently closed its second intake of capital. As of last month, the fund had about US$55 million under management. Regent Pacific has long claimed that the Indonesian economy was likely to be the first to come out of the regional downturn. Earlier this year, the firm bought about 350 flats in Jakarta for investment. Last month, Regent Pacific revealed a loss of US$57.2 million, largely due to provisions against Russian investments.