Astra to borrow $170 from banks

Astra to borrow $170 from banks

JAKARTA: PT Astra International, an Indonesian car maker, will sign an agreement to borrow up to US$170 million from several banks in November, an executive with the company said Thursday.

Astra's finance director John Slack told reporters that the loan will be co-arranged by ABN Amro Bank, HSBC, Japan's SMBC, Citigroup Inc., and BNP Paribas S.A..

Most of the loans will be used to refinance $125 million in existing debt by the end of the year, and as working capital, he added. The interest rate of the new loan will be 2.5 percentage points above the 3-month Singapore Interbank Offered Rate, or Sibor, whereas the cost of the existing loan is 3.5 percentage points above the 3-month Sibor.

"The new loan will reduce interest costs," Slack said.

Singapore's Jardine Cycle & Carriage Ltd. owns 41.9 percent of Astra. -- DJ