Singapore's CCL wins Astra stake<\/p>\n
JAKARTA (JP): An investor consortium led by Singapore's
\nautomotive distributor Cycle & Carriage Ltd. (CCL) finally won on
\nFriday the bid for the Indonesian Bank Restructuring Agency's
\n(IBRA) 39.5 percent stake (1.02 billion shares) in publicly
\nlisted PT Astra International.<\/p>\n
The winning consortium will buy all of IBRA's 1.02 billion
\nAstra shares at Rp 3,700 per share, providing the agency with
\nsome US$506 million in cash, based on the Rp 7,460 rate used for
\nthe deal.<\/p>\n
"This is a landmark transaction for Indonesia. This is also
\nIBRA's largest transaction (so far)," IBRA chairman Cacuk
\nSudarijanto said at a news conference after announcing the
\nwinner.<\/p>\n
"The price was the only consideration in picking the winner,"
\nhe added.<\/p>\n
The CCL consortium includes Batavia Investment Management
\nLtd., Lazard Asia Fund, a unit of Lazard Freres, PT Bhakti
\nInvestama and the Government of Singapore Investment Corp.<\/p>\n
CCL will be the largest investor with an estimated 23 percent
\nstake in Astra.<\/p>\n
The consortium outbid the U.S. Newbridge Capital-led
\nconsortium which included Chase Asia Equity Partners, PT
\nNusantara Investment Fund, Batavia Investment Fund and PT
\nSaratoga Investama Sedaya, a company partly owned by Edwin
\nSoeryajaya, the son of Astra's founder, William Soeryajaya.<\/p>\n
Cacuk declined to mention the price offered by the second
\nbidder. "They offered a price lower than Rp 3,700."<\/p>\n
But a source said that the Newbridge consortium offered Rp
\n3,600 per share.<\/p>\n
Many had earlier expected that Newbridge would win the bid,
\nparticularly as it had offered Rp 3,750 in an attempt last
\nDecember to buy Astra.<\/p>\n
Cacuk sidestepped a question as to why IBRA could only get Rp
\n3,700 for the Astra shares, saying, "To IBRA this (Rp 3,700) is
\nalready the best price."<\/p>\n
Separately, IBRA senior vice chairman Arwin Rasyid said that
\nfor the government the Rp 3,700 price was an "upside value"
\nconsidering that the average market value of Astra in February
\nwas about Rp 3,600 per share.<\/p>\n
Cacuk stressed that the completion of the Astra transaction
\nwould send a positive signal to foreign investors that the
\ngovernment was serious about its asset disposal plans, and that
\nIndonesia could conduct transactions in a transparent way.<\/p>\n
IBRA holds some Rp 600 trillion worth of assets. The agency is
\ntargeted to raise about Rp 17 trillion in the current budget year
\nending this month, and almost Rp 19 trillion in the next April-
\nDecember 2000 budget year. The proceeds will be used to aid the
\nstate budget.<\/p>\n
Separately, CCL managing director Philip Eng said that the
\ngroup intended to be a long-term investor in Astra.<\/p>\n
"Cycle & Carriage is committed to serving as a long-term
\npartner with Astra. We are confident of the prospects for Astra
\nunder its current management."<\/p>\n
Eng added that he felt "comfortable" with current Astra
\npresident Theodore P. Rahmat, a nephew of William Soeryajaya, who
\nlost the company in 1993 in a bid to repay the obligations of the
\nfamily's bankrupt bank.<\/p>\n
He asserted that the Soeryajaya family did not participate in
\nthe CCL consortium.<\/p>\n
Eng declined to disclose his company's grand vision for Astra.
\n"This will be developed over time as we develop our relationship
\nwith Astra and its management."<\/p>\n
Asked why CCL decided to submit a joint bid with the Lazard
\nFreres-led consortium, he said, "When two bidders joined together
\nit definitely improved the chances of success. That's what we did
\nand that's what we achieved."<\/p>\n
CCL and Lazard Freres were shortlisted last month as two
\nseparate bidders.<\/p>\n
CCL is a regional grouping with core businesses in motor
\nvehicle distribution and retail, and property investment and
\ndevelopment.<\/p>\n
Since starting in 1951 with a Mercedes Benz franchise, CCL has
\ngrown to handle many franchises in six countries.<\/p>\n
Equity analysts generally welcomed the entry of Cycle &
\nCarriage into Astra.<\/p>\n
PT SG Securities Indonesia's head of research Lin Che Wei said
\nthat CCL would create more value for Astra.<\/p>\n
"The joining of Cycle & Carriage can very well be a value
\ncreation for Astra," Che Wei said.<\/p>\n
PT Nomura Indonesia's head of research Goei Siauw Hong was not
\nso enthusiastic about the synergy to be created between CCL and
\nAstra, pointing out that the former was merely a car distributor
\ncompany with its main operation in Singapore, a small business
\narea.<\/p>\n
"In Singapore, you may have control of the market with only
\ntwo car outlets. It's not so here in Indonesia."<\/p>\n
"But with Cycle & Carriage's controlling shareholders in
\nAstra, they can apply stricter discipline to the management."<\/p>\n
Goei was specifically disappointed with the price deal
\nreceived by IBRA, pointing out that the Rp 3,700 price level was
\nbelow the market price of between Rp 3,700 and Rp 3,800 before
\nthe deal was closed.<\/p>\n
He said that a controlling investor should offer a 25 percent
\npremium of the market value. (rei\/udi)<\/p>",
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