HM Sampoerna buys 2.85% stake in Astra

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)