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)