ACeS to launch Garuda-1 satellite in September

ACeS to launch Garuda-1 satellite in September

JAKARTA (JP): After a one-year delay caused by technical
difficulties, Indonesia-based international satellite operator PT
Asia Cellular Satellite (ACeS) announced it would launch its
US$757 million Garuda-1 satellite in the second week of
September.

ACeS president and chief executive officer Adi Rahman Adiwoso
said on Tuesday the satellite would commence commercial
operations in the first quarter of 2000 and would cover at least
10 countries in the Asia Pacific region.

"We expect to break even about one year after the commercial
operation of the satellite, with subscribers of at least
140,000," he said.

He said ACeS would focus on regional coverage and charge its
subscribers reduced rates in comparison to other satellite-based
telecommunications operators, including Iridium, Globalstar and
ICO. The rate would be less than $1 per minute, he said.

The Garuda-1 satellite, made by the United States aerospace,
defense and telecommunications giant Lockheed Martin Global
Telecommunications, would be launched on a Proton D-1-e rocket
from the Baikonur Cosmodrome in Kazakhstan, he said.

The ACeS system is based on the Global System for Mobile
Communications standard and will employ dual-mode handsets (ACeS-
GSM and ACeS-AMPS). The non-exclusive contract was awarded to
Sweden's Ericsson in September 1996.

The Garuda-1 will add to the number of Indonesian satellites
currently in orbit, including the Palapa B2R and B4, the Palapa
C2, and Cakrawarta. Another satellite, Telkom-1, a satellite
owned by state-owned PT Telkom is also scheduled for launching
this year by French space launcher Arianespace.

ACeS is a joint venture company initially set up by Indonesian
PT Pasifik Satelit Nusantara (PSN), Thailand's Jasmine
International and the Philippines Long Distance Telephone Company
(LDTC).

Adiwoso said Lockheed Martin joined ACeS in January this year
by injecting $162 million for 32.55 percent of company stock. The
share proportion between the three founder companies now
comprises PSN, with 34.7 percent the biggest stockholder, LDTC
with 20.7 percent and Jasmine with 11.9 percent.

He said another company would soon become a new ACeS
stockholder.

"We hope to finalize the negotiation and all documents in
early August," Adiwoso said, declining to reveal the name of the
company.

He added that Lockheed's equity participation, which increased
ACe's total equity to $372 million, was made after Bank Danamon
and Bank PDFCI -- two of six local creditors that agreed to
provide $259 million in a syndicated loan to the company --
failed to fulfill their loan commitment.

Bank Danamon and Bank PDFCI were taken over by the Indonesian
Bank Restructuring Agency (IBRA) late last year for their failure
to repay the massive liquidity support provided by the central
bank.

The other creditors are Danareksa, which acted as underwriter
in the loan syndication, Bank International Indonesia, Bank Panin
and Bank Niaga.

Adi said the debt problems faced by Bank Danamon and PDFCI had
led ACeS to be mistakenly included in the list of IBRA's largest
bad debtors.

"But we have cleared up the case with IBRA. They (IBRA) have
announced that ACeS is no longer on the list."

ACeS is currently working on the Garuda-2 satellite,
previously designed as a backup satellite but now to serve to
expand ACeS' service and coverage.

"The Garuda-2 satellite, worth around $400 million, is also
made by Lockheed. It is expected to be ready for launching in
2001."

"We still need to find around $250 million to finance the
project," Adi said. (cst)