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.