Astra says it can get debt deal by October

Astra says it can get debt deal by October

Dow Jones, Jakarta

PT Astra International, Indonesia's largest car maker, said Wednesday it plans to reach a debt restructuring deal with creditors by October.

"We are optimistic that we can reach a deal with our creditors to restructure our debt by October," Astra International Chief Executive Teddy Rachmat told reporters.

He said he expects creditors to accept Astra's debt restructuring proposals, but didn't say why. He also refused to disclose details of the proposals the company presented to creditors.

Astra, which is 32 percent owned by Singapore's Cycle & Carriage Ltd., currently has debt worth US$726 million and Rp 881 billion ($100 million), with annual payments due until 2006.

The company needs to restructure its debt after admitting it will have trouble meeting the debt payments due later this year and in 2003.

Astra will have debt worth Rp 165 billion and $135 million maturing by December.

The company is seeking ways to reduce the burden. It may issue rights shares to help refinance part of the debt, said Rachmat.

"But I don't want to jump ahead with the idea (of issuing rights shares) without creditors' approval," he said.

Creditors include Isuzu Motors Asia Ltd., Marubeni Corp., Itochu Corp., and the Japan Bank for International Cooperation.

Shares of Astra traded on the Jakarta Stock Exchange have fallen 26 percent since speculation that it will issue rights shares erupted on July 18.

Astra shares were down 3 percent Wednesday, or Rp 100, at Rp 3,200 on lingering concerns about the rights plan.