Astra issues new shares to raise US$158m
Astra issues new shares to raise US$158m
Dow Jones, Jakarta
Indonesia's largest automaker PT Astra International said
Wednesday it hopes to raise US$158 million, or Rp 1.4 trillion
rupiah, through a rights issue in January, which is part of a
debt restructuring agreed with creditors last week.
Astra will issue 1.429 billion new shares through the rights
issue at Rp 1,000 per share. Astra said that under the rights
issue shareholders could buy seven new shares for every 13 shares
held.
The company, which manufacturers vehicles under a joint
venture with Toyota Motor Corp., said it will use $60 million of
the rights issue to help repay debt.
Creditors agreed last week in Singapore to an $850 million
debt restructuring, which allows Astra to repay only half the
$150 million coming due this year, and gives the company an
option to extend debt repayment to 2009 from 2006.
Astra has been unable to repay its debt since the 1997-98
Asian crisis slashed car sales, and pushed up the cost of foreign
borrowing in terms of local currency.
Shareholders of Astra will meet Friday to vote on the plan to
issue rights.
Astra's shares rose 4.8 percent on the news of the rights
issue to Rp 2,750, as the market reacted positively to efforts to
reduce the company's debt.
Astra plans to use about $40 million from the rights issue for
investment in units such as PT United Tractors, which assembles
heavy equipment, the company said in a statement. Just under $60
million will go into working capital, it added.
Shareholders who own Astra stock before the close of trade
Jan. 14 will be eligible for the rights issue.
Singapore's Cycle & Carriage Ltd., which owns a 32 percent
stake in Astra, has said it will support the issue by subscribing
to its full entitlement.
The rights issue price was in the middle of an earlier Rp 500
to Rp 2,000 range that Astra had indicated to the market. UBS
Warburg, JPMorgan Chase Bank and ING Barings are underwriting the
issue.
Under its debt plan, Astra plans to repay $75 million by Dec.
31, about half the amount which is set to come due this year. The
company will repay on average, between $70 million and $100
million every year thereafter through 2006. At that time, the
company will attempt to refinance the remaining debt.