Astra makes headway in restructuring foreign debt

Astra makes headway in restructuring foreign debt

JAKARTA (JP): The country's largest automaker, PT Astra
International, announced yesterday that its foreign creditors had
agreed to work with the company to restructure its mounting
foreign debts.

Company president Rini M. Soewandi said Astra would hold a
meeting with its foreign creditors in Singapore in early October
to discuss details of the debt restructuring plan.

"Restructuring our foreign debt is one of our important
strategies in surviving the crisis," she said on the sidelines of
a capital market seminar held here yesterday.

The company hopes the upcoming meeting will allow it to extend
the maturity of its short-term debts to five years.

"We hope the meeting will, for example, extend the maturity of
our debts from three years to five years."

Astra International owed a total US$1.2 billion to foreign
creditors and another Rp 2 trillion to domestic financial
institutions as of the end of July.

The company appointed Chase Manhattan Bank, Sakura Merchant
Bank and Sumitomo Bank late last month as its financial advisors
to help it restructure its dollar-denominated debts.

Rini said the company's foreign creditors understood Astra's
problems and hoped they would agree with their debt restructuring
proposals.

"The crisis has forced us to work with only 10 percent of our
normal production capacity," she said, pointing out that Astra's
large foreign debt would further slash its already depressed
earnings this year.

Rini said the company had also asked its Japanese partners,
Daihatsu Motor Co. Ltd. and Isuzu Motor Ltd., to raise their
stakes in their joint-venture car manufacturing plant, PT Astra
Daihatsu Mobil.

"We are in talks with Daihatsu on this, asking them to
increase their stake in the joint venture to around 45 percent
from 20 percent currently," Down Jones Newswires quoted her as
saying.

Astra Daihatsu Mobil is currently 80 percent owned by Astra,
with the remaining 20 percent controlled by its Japanese
partners.

The company also plans to sell its entire stake in PT Astra
Microtronics Technology (AMT), a Batam island-based producer of
semiconductor products, for $90 million to $95 million to foreign
investors.

AMT is 87.74 percent controlled by Astra, the remainder being
held by Astra subsidiary PT Astra Graphia. (aly)