Astra names advisors to restructure debt

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)