AIG buys bonds worth US$50m from Indovision
AIG buys bonds worth US$50m from Indovision
JAKARTA (JP): The American International Group's (AIG) Asian Infrastructure Fund has agreed to buy convertible bonds worth US$50 million, which offer a zero percent interest rate, from the Indovision Group.
The agreement was signed here Thursday evening by Indovision's president Peter F. Gontha and Arnold Weiss, senior vice president of AIG's principal advisor, the Emerging Markets Corporation (EMC). The agreement gives AIG an option to convert the bonds into a 13.5 percent equity interest in Indovision's parent company, PT Matahari Lintas Cakrawala (Malicak) when the latter company is eventually listed.
Thelma S. Victorio, chief financial officer of PT MediaCitra Indostar, which is also a subsidiary of Malicak, explained yesterday that Malicak plans an initial public offering of its shares sometime between 1997 and 2003.
"When we are listed, AIG will be the first to know," she said.
Indovision, a direct broadcast satellite television company owned by Gontha, Henry Pribadi and Bambang Trihatmodjo, provides subscribers with access to five overseas television programs, namely the Discovery documentary and science channel, Entertainment Sport Program Network (ESPN) International, Home Box Office (HBO), Cable News Network (CNN) International and TNT & Cartoon Network.
Last February, Indovision signed an agreement with Hong Kong's Star TV to distribute 15 channels from the Asia Sat 2 satellite.
Access to the international programs are made possible through decoders which are solely distributed and managed by Malicak.
Decoders
In order to relay the programs, subscribers need to own a parabola antenna and a decoder worth Rp 4.35 million (US$1,961), exclusive of value added tax, and must pay a $500 monthly subscription fee.
Malicak presently provides decoders for 15,000 individual subscribers and 15,000 hotel rooms and expects to increase the number of its subscribers to 100,000 within the next two years.
PT MediaCitra Indostar, another subsidiary of Indovision, will own and manage Indovision's Indostar satellite, which is expected to start operation in November next year.
Victorio said that the launching of the satellite will be a major consideration for Indovision when issuing a public offering.
AIG, a U.S.-based international insurance organization with operations in 130 countries, is a major provider of commercial and industrial coverage.
With $1.09 billion in aggregate commitments, AIG-Asian Infrastructure Fund was formed last year to make equity and convertible debt investments in infrastructure and related industries in China and the Asia-Pacific region.
Between 35 percent and 50 percent of the funds are expected to be invested in China and the remaining funds in Indonesia, Malaysia, the Philippines, Taiwan, Thailand and other Asia- Pacific countries. (pwn)