Shareholders support Astra debt resolution<\/p>\n
JAKARTA (JP): Shareholders of local auto giant PT Astra
\nInternational approved on Tuesday the company's resolution to
\nrestructure its US$1.1 billion debt.<\/p>\n
Shareholders also approved an Astra management decision to
\ndisburse Rp 477 billion ($61.2 million) to recapitalize its
\nlisted Bank Universal.<\/p>\n
The approval on debt restructuring at the company's annual
\nshareholders meeting came after the majority of Astra's creditors
\nvoted to support the company's debt resolution plan.<\/p>\n
Astra president Rini M.S. Soewandi said the company was
\nlooking for 100 percent approval from its creditors for its debt
\nrestructuring plan to have a strong basis for the program to
\nproceed.<\/p>\n
\"We have received full support from the shareholders to
\nrestructure debts. And 99.16 percent of our creditors have
\napproved our proposed debt restructuring program.<\/p>\n
\"We still want to get 100 percent creditor approval. But if we
\ndon't get 100 percent, we will go to the Central Jakarta
\nCommercial Court for ratification which will then bind all
\ncreditors.\"<\/p>\n
According to Rini, the 1998 Bankruptcy Law stipulates that a
\ndebt restructuring decision can be ratified whenever it is
\napproved by half of the creditors, who represent at least two-
\nthirds of the outstanding debt.<\/p>\n
Astra said its bank creditors, who account for 60 percent of
\nAstra's outstanding debt under restructuring, and holders of
\ndollar-denominated bonds had voted for the company's debt
\nrestructuring proposal.<\/p>\n
However, due to technical matters, several holders of rupiah-
\ndenominated bonds failed to show up at the bondholders meetings.<\/p>\n
Nevertheless, Rini said the company would continue to strive
\nto get all creditors, including holders of rupiah bonds, to
\nsupport its debt restructuring.<\/p>\n
Total Astra loans under the debt restructuring program,
\nincluding capitalized interest, are $1 billion and Rp 1 trillion,<\/p>\n
Under its restructuring plan, debt will be divided into three
\nseries, with the series one totaling $200 million and Rp 198.9
\nbillion, series two $705.4 million and Rp 701.7 billion and
\nseries three $100 million and Rp 99.4 billion.<\/p>\n
Astra offers a three year repayment period for the first
\nseries, with full interest payments and a one-year grace period
\nfor principal payments.<\/p>\n
The second series has a six-and-a-half year repayment period,
\nwith a three-year principal payment period.<\/p>\n
The third series comprises seven-year half-secured loans or
\nbonds, with warrants. Astra plans to issue warrants that will
\nconvert into shares amounting to 10 percent of the company's
\nissued share capital.<\/p>\n
After the fifth year, Astra's debt should reduce to 50 percent
\nof current outstanding debts.<\/p>\n
Rini said management also received shareholder approval to
\nraise a maximum of Rp 3 trillion from Astra's fixed-asset sales
\nto be used to repay debt over the next three-and-a-half years.<\/p>\n
However, Rini said, if the company's car revenue improved
\nwithin the next three years, Astra would reduce the amount of
\nassets it must sell.<\/p>\n
Astra, once one of Indonesia's most profitable and well-
\nmanaged conglomerates, was saddled with financial problems
\nfollowing the fall of the rupiah's value in mid-1997.<\/p>\n
The company has experienced difficulties paying off its debt
\nfollowing the rupiah's sharp depreciation. (udi)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/shareholders-support-astra-debt-resolution-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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