ASF to expand loans next year to Rp 8t

ASF to expand loans next year to Rp 8t

The Jakarta Post, Jakarta

Financing firm PT Astra Sedaya Finance (ASF) expects to
disburse loans of up to Rp 8 trillion (US$879.12 million) next
year, a rise of 10 to 15 percent from this year's target, thanks
to a higher automobile sales projection.

The firm has targeted Rp 7 trillion in loans this year.

"Gaikindo predicts up to a 10 percent increase in car sales
next year. If we assume the interest rate will remain the same,
we target a financing volume of between Rp 7.7 trillion and Rp 8
trillion," ASF president Gunawan Geniusahardja told reporters on
Monday, referring to the Association of Indonesian Automotive
Manufacturers (Gaikindo).

The association said car sales could reach 425,000 units by
year's end, up from 354,000 in 2003 and 318,000 in 2002. The
increase has been encouraged largely by the wide availability of
low-interest loans.

However, Gunawan said he was not sure whether the projected
loan expansion would still be financed by selling bonds as in
previous years.

"We'll have to look at the situation first before deciding
whether to issue more bonds or seek other financing alternatives.
If selling bonds is still the most effective way, why not issue
more?" he said.

ASF, the financing arm of the country's largest automotive
producer, PT Astra Internasional, disbursed Rp 4.9 trillion in
loans as of July -- almost twice the amount during the same
period last year -- mostly for new car purchases.

The company recorded a year-on-year net profit of Rp 174
billion in July, up 33 percent from Rp 131 billion.

"We hope to increase total net profit by about 30 percent from
last year, which stood at Rp 246 billion," said Gunawan.

Also on Monday, ASF held a public presentation of its fifth
bond sale, worth Rp 1 trillion at a fixed rate.

The bonds, to be issued in October, will be divided into 10
series with tenures ranging from one to four years. ASF, which is
47 percent owned by General Electric Services, expects the
variety of series would accommodate many demands and available
funding among investors.

Indicative coupons range from 7.875 percent to 11.875 percent,
while book building, which kicked off on Sept. 22, will run until
Oct. 4 with an offering period from Oct. 14 to Oct. 18.

The bonds, rated AA- by state-owned rating agency Pefindo, are
expected to be registered on the Surabaya Stock Exchange on Oct.
21. ASF issued its first bonds in 2000.