Astra reduces its debt to US$420 million<\/p>\n
Sandy Darmosumarto and Rendi A. Witular, The Jakarta Post,
\nJakarta<\/p>\n
Creditors of the country's largest automotive assembler and
\ndistributor, PT Astra International, have agreed to debt release
\ndate status later this month as the company has managed to trim
\nits debts by more than half to US$420 million, a senior official
\nsaid.<\/p>\n
The release date status will pave the way for the company to
\ngain flexibility in spending part of its profit on dividend and
\ninvestment.<\/p>\n
Astra's finance director John S.A. Slack told The Jakarta Post
\nrecently that the certificate of the release date would be issued
\nwithin the next two weeks as Astra had cut its debt to below $500
\nmillion, as required by creditors.<\/p>\n
Based on an agreement made with the creditors, the release
\ndate would be granted if Astra managed to cut its debts to the
\nrequired level from around $1.1 billion in 1999, when the first
\ndebt restructuring deal was signed.<\/p>\n
\"We hope in the next few weeks to get our release date
\napproved... and receive the certificate. With such status we will
\nbe given flexibility in the use of our cash.<\/p>\n
\"We have also been subject to certain restrictions on capital
\nexpenditure in the past; the restriction would be no longer in
\nplace,\" said Slack.<\/p>\n
With the possible release date in hand, Astra would be able to
\npay interim dividend to shareholders of around 25 percent of its
\nnet profit in December and a final dividend in June next year.
\nThe amount of the final dividend has yet to be decided.<\/p>\n
The interim dividend will mark Astra's first dividend payment
\nin six years.<\/p>\n
Astra's net profit this year was estimated to reach around Rp
\n4 trillion ($470 million), according to Astra's corporate
\nsecretary, Aminuddin.<\/p>\n
The release date will also give Astra the freedom to spend
\nmore on capital expenditure next year on expansion, because since
\n1999 the company's investment has been limited due to its huge
\ndebt burden.<\/p>\n
The company spent $15 million and $45 million on capital
\nexpenditure in 2002 and 2003 respectively.<\/p>\n
Elsewhere, Slack said there would be a financial impact from
\nthe company's recent move in divesting a 46 percent stake in
\njoint-venture auto manufacturer plant PT Toyota Astra Motor (TAM)
\nto partner Toyota Motors Corporation.<\/p>\n
He explained that Astra's consolidated revenue this year would
\nbe reduced by around 10 percent because of the divestment.<\/p>\n
\"The impact is small; less than 10 percent of Astra's
\nconsolidated revenue,\" he said.<\/p>\n
Astra's stake in TAM has been reduced to 5 percent, while
\nToyota's stake has increased to 95 percent.<\/p>",
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