Astratel ties up with foreign investment firm

JAKARTA (JP): London-based investment company CDC Capital Partners has signed a strategic alliance agreement with PT Astratel Nusantara, an affiliate of automotive concern PT Astra International.

Under the agreement, CDC will inject US$30 million as equity participation in Astratel and it would, in return, get a 22.5 percent ownership in Astratel.

Astratel's vice president, Angky Tisnadisastra, said, "Astratel will use the $30 million fund to finance new telecom infrastructure in Sumatera."

He said Astratel, which won a government contract in 1998 to provide a high-speed GSM cellular service in Sumatera, would spend between $100 million and $150 million to build the cellular telephone facilities on the island.

"Astratel will spend between $15 million and $20 million for the first stage of the development," he said here during a media briefing.

Astratel's current net equity, said Angky, stood at Rp 430 billion, that would soon be increased with the $30 million.

After such an injection by CDC Capital, the share ownership of Astra International in Astratel would decrease from 100 percent to 77.5 percent, Angky said.

Angky did not, however, say when the disbursement of the money to Astratel would be, but admitted that the company's first stage development of telecom infrastructure in Sumatera would start later this year.

With its Rp 430 billion equity, Astratel has total assets of Rp 592 billion as of end of 1999, up from Rp 454 billion at the end of 1998.

The company, which is currently operating as one of state- owned PT Telkom's joint-operation partners, booked a net income of Rp 108 billion in 1999, as compared to Rp 140 billion in 1998.

"The high net income in 1998 was due to a foreign exchange- related extraordinary transaction," Angky said.

CDC Capital has $3.5 billion invested in more than 50 developing countries.

It has had a representative office in Indonesia since 1971. Since then, CDC has approved deals worth over $500 million in a wide range of sectors, including telecommunications and agribusiness. (udi)