Federal Motor gets loan

JAKARTA (JP): PT Federal Motor, the sole agent and manufacturer of Honda motorcycles, obtained US$100 million in a syndicated loan under an agreement with 23 foreign banks which was signed in Singapore yesterday.

The three-year loan charges an annual interest rate which is floating 1.98 percent above the Singapore inter-bank offered rate (SIBOR). The loan will be used to refinance a previous syndicated loan which was used by Federal Motor for importing spare parts.

Federal Motor, the country's largest motor-bike producer, is a subsidiary of PT Astra International which is listed on the Jakarta Stock Exchange.

Astra's Senior Manager for Public Relations Aminuddin said yesterday that the loan syndication was 60 percent oversubscribed, indicating strong confidence of foreign creditors in the company.

The loan syndication was led by the Long Term Credit Bank Ltd., Sanwa Bank Ltd. and Sumitomo Bank Ltd. Twenty other banks in Singapore participated in the syndication.

Aminuddin quoted financial analysts in Singapore as saying that the terms of the loan were among the best obtained by an Indonesian private company in Singapore.

The loan, for example, is secured not by Federal Motor's fixed assets but by its account receivables and inventories, he said.

Also present at the signing of the loan agreement in Singapore were Astra's President T.P. Rachmat and Financial Director Rini M.S. Soewandi and Federal Motor's President Budi Setiadharma. (vin)