Astra one step closer to debt solution<\/p>\n
JAKARTA (JP): PT Astra International, the country's largest
\nautomotive firm, won approval from the majority of its
\nshareholders on Thursday to restructure US$946 million and Rp 900
\nbillion ($101 million) in debt.<\/p>\n
Shareholders also approved the board of directors' plan to use
\npart or all of the company's assets as collateral for existing or
\nfuture loans.<\/p>\n
However, the Indonesian Bank Restructuring Agency, now the
\nfirm's majority shareholder with a roughly 40 percent stake,
\nrefused to support the debt-restructuring plan, Astra president
\nRini M.S. Soewandi said.<\/p>\n
\"I'm sad after learning that IBRA abstained in the vote, while
\nour foreign shareholders approved our plan,\" she said.<\/p>\n
IBRA assumed 10 percent ownership from Nusamba, which is
\ncontrolled by Mohamad \"Bob\" Hasan, 9.27 percent from Indo Artsa
\nBoga, part of the Salim Group, 9.25 percent from Gentala
\nSanggrahan under Usman Atmadjaja, 7.16 percent from Delta Mustika
\nunder Prayogo Pangestu and 1.16 percent from Gajah Tunggal Mulia
\ncontrolled by Sjamsul Nursalim.<\/p>\n
The assets were ceded by their owners to IBRA after their
\nbanks failed.<\/p>\n
Despite IBRA's abstention, Rini said Astra would proceed with
\nits debt restructuring plan because it gained approval from the
\nmajority of shareholders.<\/p>\n
\"We will meet with the creditors and hold a vote on the
\nrestructuring plan on April 21,\" she said after the company's
\nextraordinary shareholders meeting.<\/p>\n
Voting will be based on Indonesia's bankruptcy law guidelines.
\nThey stipulate at least half of the company's creditors must
\nparticipate in the vote and the voting decision must be supported
\nby creditors representing two-thirds of the total outstanding
\ndebt.<\/p>\n
\"We hope to get approval of the majority of our creditors,\"
\nshe said.<\/p>\n
She acknowledged that creditors and bondholders were cool to
\nAstra's recent debt buyback offer. The company bought back just
\n$24.3 million of unsecured debt, well below its $150 million
\ntarget.<\/p>\n
Analysts attributed the low turnout to the company's offer to
\npay only 30 cents per U.S. dollar for the unsecured debt.<\/p>\n
\"From one side, I'm sad. But from the other, I feel the
\nresults are positive because this shows that our creditors want
\nto remain with us,\" Rini said.<\/p>\n
She noted the debt buyback program cost Astra $7.5 million,
\nfar shy of the $45 million the company allocated. The remaining
\n$37.5 million will be used to help make resumed interest payments
\nif creditors agree with the company's plan.<\/p>\n
If the majority of creditors approve, Rini said, Astra hoped
\nto sign definitive agreements with them by the end of June.
\nInterest payments, frozen since last year, would resume in July.<\/p>\n
Rini said there was now $62.5 million cash in hand for
\ninterest payments.<\/p>\n
According to the plan, all remaining debt will be divided into
\nthree tranches.<\/p>\n
The first tranche would total $200 million and Rp 235 billion
\n(21 percent of the debt), and the second tranche $647 million and
\nRp 760 billion (68 percent). The final tranche would consist of
\n$100 million and Rp 117 billion (11 percent).<\/p>\n
Astra is proposing a three-year repayment period for the first
\ntranche, with full interest payments and a one-year grace period
\non principal payment.<\/p>\n
The second tranche has a six-year repayment period, with a
\nsix-month grace period on interest payments and three-year period
\nof principal payment.<\/p>\n
The third tranche consists of seven-year zero coupon loans or
\nbonds, with warrants. Astra plans to issue warrants that will
\nconvert into shares amounting to more than 10 percent of the
\ncompany's issued share capital.<\/p>\n
Shareholders also authorized the board to issue new shares of
\nup to 25 percent of Astra's outstanding share capital without
\nproceeding through the rights issue process. The price of the new
\nshares will at least be Rp 1,200.<\/p>\n
Astra shares rose Rp 125 to close at Rp 900 on Thursday.
\n(02\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/astra-one-step-closer-to-debt-solution-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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