C&C ups Astra stake to 34.3%

C&C ups Astra stake to 34.3%

Dow Jones, Singapore

Motor vehicle distributor Cycle & Carriage Ltd. said Wednesday it has raised its stake in Indonesia's PT Astra International to 34.3 percent from 31.1 percent.

C&C subscribed to 553.4 million Astra rights shares, comprising its own entitlement as well as Toyota Motor Corp.'s entitlement, for US$77.7 million.

In addition, C&C acquired 11.3 million Astra shares from the market for $2.8 million.

The acquisition of the shares was funded from internal resources and external borrowings, the company said. It had obtained a loan facility of up to S$100 million ($57 million) on Jan 21.

C&C said the increased shareholding is in line with its objective to consolidate and enhance its position in the Southeast Asia automobile sector.

It added that it believes Astra will continue to maintain its dominant position in the Indonesian automotive and motorcycle markets and contribute positively to C&C because of its good long term prospects.

C&C also said the rights issue - at a steep discount to the current share price - represented an "excellent opportunity" to increase its shareholding.

The company said the financial impact of the purchase of rights shares on its earnings per share will be disclosed when it announces its financial results for the year ended Dec. 31, expected around Feb. 25.

Astra offered 1.4 billion new shares at Rp 1,000 each to shareholders via a rights issue on Dec. 18, at a ratio of seven new shares for every 13 held.

The exercise to raise up to Rp 1.43 trillion was intended to partly reduce its debt.