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).