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)