Cycle & Carriage open to more Astra shares
Cycle & Carriage open to more Astra shares
SINGAPORE (Dow Jones): Singapore auto-distributor Cycle &
Carriage is open to further raising its stake in Indonesian
conglomerate PT Astra International, but has no immediate plans
to do so, a senior executive says.
Neville Venter, C&C's group finance director, told Dow Jones
Newswires in a recent interview that the Singapore company's
plans to raise its stake are limited by its pocket book.
"If we come up with more money again we would," Venter said.
"We like the shares very much, we are very happy to carry on
buying, but obviously we have financial constraints."
Venter's comments came days after Cycle & Carriage lifted its
stake in Astra to 27.2 percent by buying 103.6 million shares, or
3.9 percent of the company, from Eurasie SAS, a member of the
Lazard Asia Fund, for US$50 million.
In March, Cycle & Carriage led a consortium that won a bid to
buy 40 percent of Astra shares held by the Indonesian Bank
Restructuring Agency.
The consortium includes the Government of Singapore Investment
Corp., Indonesia's Bhakti Investama - part owned by the U.S.-
based Quantum Fund of George Soros, Batavia Investment management
Ltd. and Lazard Asia Fund, a unit of Lazard Freres.
Venter denied there was a rift within the consortium, as talk
in Jakarta has it.
"Within the consortium, there are no particular problems...
They have been very happy," he said.
Venter said several unrelated events converged to create an
impression of disunity with the group. Among them was the
decision by Quantum Fund to sell out its equities holdings, which
may include shares in Astra and the release into the market of
about 30 million shares under the Employee Shares Option Plan.
Regarding the shares it bought from Lazard, Venter said it was
something that the two sides had discussed before the deal was
finalized, but couldn't implement because of financial
constraints.
Venter said Astra's immediate future is bright. He said it's
very likely that auto sales in Indonesia will hit 240,000 units
for the year - as Astra predicts.
"It's not just the extra units sold," he said adding that
rises in auto sales boost sales throughout Astra's retail,
finance and insurance arms. "They are making money every step of
the way."
The only blimp for Astra is the volatility of the Indonesian
rupiah, which can hurt its debt repayment plans.
"There is a short-term impact," he says of the rupiah's
volatility. "Might have to pay US$10 million to US$20 million
more. It's not a major impact as long as the rupiah remains below
10,000 (to the U.S. dollar).