Astra calls on government to sell its shares widely

Astra calls on government to sell its shares widely

JAKARTA (JP): Indonesia's auto giant PT Astra International
suggested on Thursday that the government sell its shares in
Astra to as many investors as possible to expand the company's
shareholder base.

Astra chief executive Rini M.S. Soewandi made it clear that
the company was by no means blocking the Indonesian Bank
Restructuring Agency's (IBRA) plan to sell between a 20 percent
and 30 percent stake in the company to a few foreign investors.

"We only suggest that, if possible, the government shares are
offered to as many investors as possible to broaden the Astra
shareholder base. In our opinion, that would strengthen the
company and improve the control mechanism from shareholders,"
Rini said.

IBRA owns almost 40 percent of Astra as a result of its
assumption of a big block of shares pledged to the agency by
several conglomerates in repayment for their debts to the central
bank.

A consortium led by U.S. investment funds Newbridge Capital
and Gilbert Global Equity Capital has already placed a bid for
the Astra stake with IBRA.

But some media reported that Astra tried to block IBRA's
efforts to bring in Newbridge to carry out due diligence on the
company.

Rini flatly denied the reports, saying that unresolved legal
technicalities did not allow Astra to immediately meet IBRA's
request that new potential investors conduct due diligence on the
company.

"Because IBRA is not listed among Astra's shareholders, Astra
is legally required to ask for approval from the capital market
watchdog Bapepam before allowing the due diligence to proceed.
But so far, we have yet to get a green light from Bapepam.

"It's not true that Astra is blocking a sale or not
cooperating with IBRA on its plan to sell a stake," Rini said.
"There are some technicalities that need to be clarified. This is
a gray area that needs to be worked out."

"I believe these technicalities could be handled in the near
future," she added.

IBRA said in a statement on Thursday that it had set Rp 3,750
as the minimum price for its Astra shares, based on a bid by the
preferred bidder.

The agency has named the consortium of foreign investors led
by Newbridge Capital and Gilbert Global Equity Capital as the
preferred bidder.

Newbridge is a global private equity fund with over $12
billion in committed capital for investment; and Gilbert Global
Equity Capital is also a private equity fund with over $1.1
billion of committed capital.

IBRA also said that it would open a second round of bidding
for a part of its stake on Jan. 17, giving a chance for others to
bid on the stake.

It expects to complete the transaction by the end of February.

Following IBRA's announcement, Astra's shares jumped by Rp 150
to close at Rp 3,750 on Thursday.

Dealers said market was upbeat that the planed sale of IBRA's
stake in Astra would proceed smoothly. They also said that the
market was also confident on the company's future performance,
especially after its successful debt restructuring program.

Astra's Financial director Dorys Herlambang said the company
was still assessing plans to hold a rights issue early next year,
amounting up to 25 percent of its outstanding shares.

To achieve optimal prices, she suggested that IBRA and Astra
conduct joint-marketing efforts to sell the rights shares and
IBRA-owned common shares.

Dorys said Astra planned to divest assets that were not deemed
essential to its future business plans in a bid to raise fresh
funds to repay its debt.

Given Astra's plans to focus its business on retail rather
than manufacturing, the company was seeking to reduce stakes in
joint ventures with several international car makers, Dorys said.

Astra has joint ventures with several major auto makers,
including Germany's BMW, Nissan Diesel Motor Co. of Japan and
Japan's Honda Motor Co. Ltd., with which it produces motorbikes.

"By divesting more of our ownership at joint ventures to our
foreign partners, we hope they will increase their commitment (to
Indonesia) and boost our exports," she said.

She also said that early next year, Toyota Astra Motor, a
joint venture with Toyota Motor Corp. of Japan, would launch a
new version of its popular multipurpose Kijang van, which will
differ slightly from the 1,800-cc current model.

The sale price for the new car would be slightly higher than
the current price, partly due to the yen's strength against the
U.S. dollar and the rupiah, she added. (rid/rei)