Econ has option to own 31% stake in Centralindo<\/p>\n
SINGAPORE (Reuters): Econ International Ltd said yesterday it
\nhad signed conditional agreements to subscribe for US$66.65
\nmillion exchangeable notes, which could be exchanged for shares
\nin an Indonesian telecommunications firm.<\/p>\n
The notes, to be issued by PT Putramitra Luhursejati and PT
\nMitramarga Senalestari, could be exchanged for a 31 percent stake
\nor 12,090 shares in PT Centralindo Panca Sakti, construction-
\nbased Econ International said in a statement.<\/p>\n
If exercised, the option could translate to a transaction
\nvalue of US$215 million for the entire issued share capital of
\nCentralindo, the statement said.<\/p>\n
The notes will have a term of five years with an option to
\nEcon to extend their maturity for a further two years and will
\ncarry a coupon rate of one percent a year on the principal.<\/p>\n
Econ has also been granted an option to buy either a nine
\npercent stake or 3,510 Centralindo shares held by the issuers for
\nUS$19.35 million or subscribe for additional notes totaling
\nUS$19.35 million, the statement said.<\/p>\n
\"The company believes that the opportunities in
\ntelecommunications in Indonesia are very attractive as a result
\nof the increasing demand for telecommunications services,\" Econ
\nsaid on its proposed diversification.<\/p>\n
It said Indonesia's fixed lines and cellular penetration rates
\nremain the lowest in the world at 2.1 percent and 0.3 percent
\nrespectively.<\/p>\n
\"The greatest growth potential lies in Centralindo's mobile
\ncellular license,\" it said.<\/p>\n
It said the International Telecommunications Unit estimated
\nthere would be up to five million cellular subscribers in
\nIndonesia by 2000.<\/p>\n
\"This implies a forecast cellular subscriber annual compounded
\ngrowth rate of approximately 73 percent,\" Econ said.<\/p>\n
It said there was also \"considerable potential\" for
\nCentralindo's 26 percent interest in PT Surya Citra Televisi
\n(SCTV), one of the five private broadcast companies in Indonesia
\nwith 20 percent market share of viewers.<\/p>\n
\"With the acquisition, the company intends to establish
\ntelecommunications and media as a new area of business and to
\nexplore further opportunities in the Asia Pacific region,\" it
\nsaid.<\/p>\n
Econ added it intends to develop infrastructure activities,
\nincluding telecommunications network services and media
\nbroadcasting systems, as one of its core areas.<\/p>\n
It said the transaction would be financed by internal
\nresources and bank borrowings.<\/p>\n
NM Rothschild & Sons (Singapore) Ltd has been appointed
\nfinancial advisors to Econ on the transaction.<\/p>",
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