Astra to sell stake in Toyota JV

Astra to sell stake in Toyota JV

Agence France Presse, Jakarta

PT Astra International, the country's largest automotive firm,
will on Thursday sign a memorandum of understanding on the
proposed sale of most of its stake in a joint venture with
Japan's Toyota Motor Corp., finance director John Slack said.

Slack said Wednesday Astra was proposing to sell a 46 percent
stake in PT Toyota Astra Motor, retaining just five percent.

Astra said the divestment will help it raise cash for debt
repayment and is also part of its strategic shift in focus to
distribution.

Slack said the non-binding agreement would help speed up the
negotiations.

"It is an indication that we are seriously discussing the
terms of the sale and we hope we can conclude it by the third
quarter," he told financial newswire AFX-Asia.

Slack declined to comment on the pricing, saying it needs
further negotiation.

The Financial Times said this week the stake is expected to be
sold for up to US$200 million. It said Astra would retain a
majority share in the joint venture's distribution business.

The paper quoted a source close to the deal as saying Toyota
plans to use the two joint venture factories as a regional
manufacturing base while moving output of sedans to Thailand.

It would use the Indonesian factories to build a new model to
replace the Kijang, the high-wheelbase utility vehicle that is
Indonesia's most popular car.

A debt restructuring agreement approved by creditors in
December requires Astra to use 75 percent of the after-tax value
of any asset sales to pay off debt. Astra now has outstanding
debts of $780 million dollars.