Astra hopes to reach debt restructuring

Astra hopes to reach debt restructuring

Dow Jones, Jakarta

Car maker PT Astra International said Thursday it hopes to
reach a debt restructuring agreement with creditors in October
which will include a planned US$100 million rights issue.

The company will meet with its creditors next week in
Singapore to discuss the debt workout, John Slack, Astra's
finance director, told reporters.

Astra is under pressure to remain current on its $800 million
foreign debt, which the company built up during overzealous
expansion in the 1990s. The company has said it will only be able
to muster enough funds to repay about half of the almost $200
million coming due this year.

A debt restructuring plan is likely to include the sale of
assets as well as a rights issue, to raise cash.

The rights issue shares will total about 5 percent of the
company's current total stock. According to first-half financial
statements, Astra has a total of 2.6 billion shares.

The issuance of the rights shares is also aimed to strengthen
Astra's long term capital-based growth," Slack said.

Astra is 32 percent owned by Singapore's Cycle & Carriage Ltd.

The company plans to sell part of its stake in PT Toyota Astra
Motor - a 50-50 joint venture car manufacturing company with
Japan's Toyota Motor - to raise cash under the debt
restructuring.

Astra has said a deal by which Toyota Motor would take a 90
percent stake in its manufacturing operations in Indonesia is
expected by the year-end, or early 2003.

Analysts expect the sale would likely fetch Astra some $200
million-$300 million - enough to pay a large chunk of its debt
and stabilize its finances.

In August, the company sold a 74.56 percent stake in debt-
ridden plywood producer PT Sumalindo Lestari Jaya for Rp 13.98
billion ($1.5 million) to unlisted PT Sumber Graha Sejahtera.

Astra's creditors include Isuzu Motors Asia Ltd., Marubeni
Corp., Itochu Corp., and the Japan Bank for International
Cooperation.