Shareholders will discuss Indofood's future in the wake of the sale of 60 per cent of the company to Japan's Nissin Food Products and First Pacific Co Ltd, a unit of the Salim Group which currently holds the majority of Indofood.

New directors are also to be appointed, with a new president director likely to replace Anthony Salim, son of Salim Group founder Liem Sioe Liong who is a close associate of Suharto.

Analysts say the Indofood sale would give the company some protection from a political drive to reduce the power of Indonesia's large conglomerates, many of which, like Salim Group, are owned by ethnic Chinese.

But they say Indofood still faces problems ahead -- in particular, Indonesia's proposed new anti-monopoly law. ``Indofood could be affected as it may be forcedto sell some of its most lucrative units to sharply reduce market share,'' said head of research Joshua Tanja with Paribas Asia Equity.

Parliament is currently debating a draft anti-monopoly bill. Legislators have said market share is likely to be limited to 50 per cent on a provincial level, higher than the 30 per cent many initially demanded. Companies are expected to be given one year to meet the requirements once they become law.

Indofood has a 90 per cent share of the domestic noodle market, a virtually exclusive monopoly in wheat flour processing and a 60 per cent domestic share in branded cooking oil.

``We may see further restructuring in Indofood following the implementation of the law, because it has to reduce its huge market share and avoid vertical integration,'' said head of research Anton Karlam with Panin Sekuritas.

Tanja said the impact on Indofood was not yet clear. ``As is the case with some laws here, it would depend on the implementation. Some questions still remain unresolved,''he said.

``Indofood may have to reduce its noodle division to meet the upcoming anti-monopoly law which is likely to finally limit market share to 50 per cent.''

Indofood currently has production capacity of 13 billion packs of noodles annually. It sold around eight billion packs of noodles in 1997, contributing almost half of its consolidated net sales of around five trillion rupiah ($555 million).

The noodle division is also a key contributor to the firm's consolidated operating profit, contributing around two- thirds of operating profit in 1997.

Indofood suffered a net loss of 1.2 trillion rupiah in 1997 against a net profit of 351.3 billion rupiah in 1996, due to a huge foreign exchange loss. It posted a net profit of 81.8 billion rupiah in the first nine months of 1998.

The proposed monopoly law is also expected to ban vertical integration, in which companies control the whole production process from producing raw materials right to distributing the end results.

The law was promised as partof Indonesia's arrangements with the International Monetary Fund.

Indofood's vertical integration has been among the targets of criticism. It owns palm oil plantations and cooking oil plants, the Bogasari flour processing unit, instant noodles processing facilities and distribution firms for its products.

``The law is likely to step up the firm's efforts to sell its Bogasari flour mill,'' Karlan of Panin said.

Indofood has already said it would sell the Bogasari unit, which contributes a lower return on assets than the firm's noodle division. The flour mill division contributed 179 billion rupiah in operating profit out of consolidated operating profit of 854.9 billion rupiah in 1997.

Meanwhile, Bogasari's assets accounted for 3.2 trillion, compared with nodole division's 2.6 trillion rupiah and Indofood's consolidated assets of 7.9 trillion rupiah in 1997.

Analysts said that four foreign firms were likely to have expressed interest in taking over Bogasari -- Cargill and ConAgra Inc of the UnitedStates, Australian Wheat Board Ltd and a Japanese conglomerate, analysts said.