HM Sampoerna buys 2.85% stake in Astra

JAKARTA (JP): The publicly-listed tobacco firm PT HM Sampoerna confirmed yesterday that Sampoerna Investment Corp., a unit of its Singapore-based wholly-owned subsidiary Sampoerna International Pte., has purchased a 2.85 percent stake in PT Astra International.

The announcement provoked S&P and Moody's to downgrade Sampoerna's credit rating.

Sampoerna's director of corporate development, Jonathan Zax, said yesterday that the transactions were executed on the Jakarta Stock Exchange (JSX) at a cost of Rp 157.6 billion (US$67 million), representing a per share price of Rp 4,475.

He declined to explain when the transaction was done or whose shares were bought. He said only that a notification about the transaction was filed with the Capital Market Supervisory Agency (Bapepam) on Monday, two days after Putera Sampoerna, the founder and president of HM Sampoerna, reported his share ownership in Astra.

"I cannot tell you the motive (of the share purchase) but I can confirm that it was separated from the transactions made by Putera Sampoerna," Jonathan told The Jakarta Post.

He said, however, that because Sampoerna International is 100 percent owned by HM Sampoerna, Putera and HM Sampoerna (as affiliated parties) currently become the largest shareholders of Astra International.

As of Sept. 25, the largest shareholder was timber tycoon Prajogo Pangestu through PT Delta Mustika with a 10.6 percent stake.

A dealer with a Japanese-based brokerage told the Post that buying interest in Astra remained strong yesterday but failed to push up share prices as some local investors took profit during the confusion about Putera's and HM Sampoerna's moves.

Astra's local price declined two points yesterday to close at Rp 3,750, while its foreign price was unchanged at Rp 4,550. Total turnover was estimated at six million shares.

Meanwhile, a noted economist, who declined to be named, said that the acquisitions of Astra shares by Putera and HM Sampoerna are a "risky" investment.

"It's worth noting that the automotive industry is a completely new business for Putera Sampoerna. So why should he spend so much money," the economist told the Post.

"So, I'm not surprised with a latest report that S&P and Moody's have downgraded Sampoerna's credit rating," he added.

He said that Putera once failed to enter the banking sector for diversification.

"I also doubt that he will succeed in automotive business," he noted.

He said that although Putera and HM Sampoerna have disclosed their positions, it is questionable who is going to control Astra.

Reuters reported yesterday that Standard and Poor's (S&P) has placed its BBB-plus corporate credit rating for HM Sampoerna on creditwatch with negative implications.

S&P said it had also put a BBB rating on the US$-denominated guaranteed notes issued by Sampoerna's subsidiary Sampoerna International Finance Co B.V. on creditwatch with negative implications.

S&P said the rating action followed an announcement by Sampoerna of a 2.85 percent equity investment in Astra.

"While the magnitude of the investment is not at this point material, Standard & Poor's considers the investment to be outside the expected expansion parameters of kretek (clove blended) manufacturer Sampoerna, and could lead to heightened credit risk," S&P said.

Meanwhile, Moody's Investors Service has also said that it confirmed its Baa3 rating on the long-term debt of Sampoerna International Finance Company B.V.'s US$200 million notes and changed its rating outlook for the same reason.

"The change in our rating outlook is prompted by the announcement by Sampoerna that its wholly-owned subsidiary, Sampoerna Investment Corporation (BVI) and Sampoerna's president director, Putera Sampoerna, on a private basis, acquired 2.85 percent and 9.8 percent, respectively, of PT Astra International (Astra)." (alo)