Econ dumps Indonesian telecom deal

Econ dumps Indonesian telecom deal

SINGAPORE (Reuters): Singapore's Econ International Ltd (Econ) said yesterday it was scrapping a US$66.65 million deal with Indonesian telecommunications firm PT Centralindo because of Southeast Asia's economic crisis.

"The region has experienced extreme volatility in the value of its currencies in recent months with resultant impacts on their economies," Econ said in a statement.

"As such, the directors are of the view that the company should not proceed with the Centralindo transaction under the original terms and hence the transaction has been aborted," it said.

Econ signed conditional agreements on October 20 to subscribe for $66,65 million exchangeable notes that could be exchanged for a 31-percent stake in Centralindo.

It was also granted an option to buy either a nine percent stake n Centralindo for $19.35 million or subscribe for additional notes for that amount.

Centralindo has a mobile cellular license and Econ said at the time that was its great attraction.

Indonesia has suffered worst in the region's crisis and has agreed to wide-ranging economic reforms in return for a $43 billion rescue package put together by the International Monetary Fund.

Indonesia's rupiah has dropped more than 75 percent against the U.S. dollar since July.