Astra names advisors to restructure debt
JAKARTA (JP): The country's largest automobile producer, PT Astra International, has appointed three foreign banks -- Chase Manhattan Bank, Sakura Merchant Bank and Sumitomo Bank -- as financial advisors in its efforts to restructure US$2 billion in foreign debt, the company president said yesterday.
Rini M. Soewandi said the newly-appointed financial advisors were scheduled to meet with the firm's foreign creditors, mostly Japanese banks, next week in Singapore to discuss the debt rescheduling plan.
"Our financial advisors will have their first meeting with our foreign creditors in Singapore on August 5," she said after an extraordinary meeting of shareholders.
She said that Chase Manhattan Bank would coordinate the team.
"The aim of the meeting in Singapore is to introduce our financial advisors to our foreign creditors," she said. "Talks on the restructuring plan are still in a preliminary stage," she added.
She said the company also owes Rp 2 trillion to domestic financial institutions.
She said that rescheduling the foreign debt was urgent to ensure the company survived the country's worst ever economic crisis, which was triggered by a sharp drop in the value of the rupiah against the U.S. dollar.
The appointment of financial advisors to help reschedule the offshore debt meant the company would not need to join the newly established Indonesian Debt Restructuring Agency (INDRA), she argued.
INDRA, which is expected to start operations on August 3, will help cash-strapped companies repay foreign creditors.
As part of the company's business restructuring program Astra International obtained approval to sell the company's entire stake in PT Astra Microtronics Technology (AMT), a Batam island- based producer of semiconductor products, from shareholders yesterday.
"PT Astra International plans to sell all of its 96.07 million shares in AMT," she said.
Although the company has yet to find a buyer, she said the sale was expected to raise between US$90 million and $95 million.
Astra controls an 87.74 percent stake in AMT and the remainder is held by Astra subsidiary PT Astra Graphia.
"The sale will allow the company to focus more on its core business activities and strengthen its financial structure," she said.
Rini said yesterday that the company's recent poor financial performance had yet to bottom out and that results from the first quarter of the year were not "promising".
Astra sold 10,804 cars in the first quarter of this year, down 62 percent from the 28,603 cars sold in the same period last year.
Rini declined to provide financial details for the first half of the year but said car sales for June were a mere 5 percent of sales in the same month in 1997.
"We will announce figures for the first half of this year in mid August after Astra's subsidiaries have submitted their financial reports," she said.
Astra International director Rudyanto Hardjanto said the company plans to resume production of its popular Kijang model in September this year. Production was halted in May due to sluggish demand.
"We expect to produce around 1,000 Kijangs in September," he said.
Rudyanto, who is also president director of PT Toyota Astra Motor -- a joint venture between Astra International and Toyota Motors Corp. of Japan -- said that resumption of production would allow the company to reinstate 30 percent of its 4,000 strong workforce. The workers are currently on paid leave.
"Although we plan to assemble 1,000 Kijangs, production will still be lower than that before the crisis," he said. (aly)