Market may be unreceptive to Astra shake-up: Executive<\/p>\n
JAKARTA (JP): The market would react negatively to a change
\nnow in Astra International's senior management and the firm's
\nshare price would plummet, a securities company executive warned
\non Monday.<\/p>\n
"Astra management is known for its high professionalism and
\nindependence. They are really working for the company, not just
\nfor the majority of the shareholders," associate director of PT
\nCiptadana Sekuritas Edhi Santoso Widjojo said in reply to
\nquestions concerning rumored impending changes in Astra's
\nmanagement.<\/p>\n
Informed sources said Cacuk Sudarijanto, the new chief of the
\nIndonesian Bank Restructuring Agency, had proposed that the Rini
\nSoewandi-led management team be replaced at the company's
\nupcoming extraordinary shareholders meeting early next month.<\/p>\n
The sources said the request was related to the legal problems
\nand controversy encountered by IBRA in selling its stake in Astra
\nto an American investor group led by Newbridge Capital and
\nGilbert Global Equity Partners.<\/p>\n
The move seemed to have been prompted by a complaint by
\nNewbridge\/Gilbert late last month, accusing Astra's management of
\nobstructing its conducting of a due diligence of Astra as part of
\nits agreement with IBRA.<\/p>\n
Astra's management flatly denied the charges, arguing that the
\nsecurities market watchdog Bapepam approved the conducting of the
\ndue diligence only on Dec. 15.<\/p>\n
Astra president Rini Soewandi has repeatedly denied that she
\nand other directors tried to block the deal or obstruct the due
\ndiligence needed to complete the transaction.<\/p>\n
Rini said Astra only requested transparency, what she called a
\nhallmark of Astra's management, and for an open tender involving
\nmany bidders to gain the highest value of its shares.<\/p>\n
"As a publicly listed company, we have to play by the rules of
\nBapepam and the securities laws," Rini said.<\/p>\n
Astra executives have asserted that as a blue-chip company on
\nthe Jakarta Stock Exchange, Astra International is known for the
\nhigh standards of transparency and disclosure of information.<\/p>\n
Edhi said Astra was one of the few major corporate debtors who
\nsucceeded last year in restructuring about US$1 billion in
\nforeign debts.<\/p>\n
"This success truly reflects the trust and confidence of the
\ndozens of Japanese, American and European creditors in the Astra
\nmanagement."<\/p>\n
Edhi suspected a hidden agenda behind Cacuk's request.<\/p>\n
He said Cacuk might want to immediately bring in
\nrepresentatives of prospective investors, including members of
\nAstra's founder, the Soerjadjaja family.<\/p>\n
"I will sell Astra shares if news of the replacement of Astra
\nmanagement hits the media tomorrow (Tuesday)," Edhi said.<\/p>\n
Another analyst, Emilia Dianawati from PT Bapindo Bumi
\nSekuritas, agreed there was no reason to change Astra's
\nmanagement when the company's performance showed significant
\nimprovement.<\/p>\n
IBRA, under pressure to raise Rp 17 trillion ($2.4 billion)
\nfor the state budget by the end of March, signed a deal with
\nNewbridge\/Gilbert on Dec. 9 under which the agency would sell
\nits stake in Astra.<\/p>\n
If the transaction is closed next month as scheduled, IBRA
\nwould receive more than Rp 3.5 trillion (about $510 million).<\/p>\n
Most analysts consider the Newbridge\/Gilbert deal as crucial
\nfor winning back the confidence of foreign investors,
\nparticularly after controversy forced Standard Chartered Bank
\nPlc. to quit its investment deal with IBRA for Bank Bali early
\nlast month.<\/p>\n
The largest single shareholder in Astra, IBRA controls about
\n40 percent of the firm through a combination of stakes pledged to
\nit by conglomerates as repayment of their debts to the central
\nbank.<\/p>\n
Other shareholders include Toyota Motor Corp., the
\nInternational Finance Corp., which is the private-sector arm of
\nthe World Bank, and the investing public.<\/p>\n
"I will truly be surprised if the rumor turns out to be true,"
\nEmilia said.<\/p>\n
Astra's share price has risen from as low as Rp 225 last year
\nto more than Rp 3,750 at present, with the company making a sharp
\nturnaround from a huge loss in 1998 to a net profit of Rp 330
\nbillion in the first nine months of last year.<\/p>\n
"Astra is not only an automotive company but a holding company
\nwith many subsidiaries operating in a wide diversity of
\nbusinesses," Emilia said.<\/p>\n
Astra's management, Emilia added, must be staffed by competent
\nprofessionals capable of managing car and motorcycle industries,
\nagribusiness, financial services, heavy equipment and many other
\nsectors covered by its subsidiaries.<\/p>\n
Astra's management seemed irked that Newbridge\/Gilbert was
\nselected without an open tender and the consortium was provided
\nwith prerogatives without having to provide an up-front payment
\nto buy shares. (udi)<\/p>",
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