IPTN signs jet-financing agreement
JAKARTA (JP): The Bandung-based state aircraft manufacturer PT Industri Pesawat Terbang Nusantara (IPTN) signed a financing agreement yesterday with private firm PT Dua Satu Tiga Puluh (DSTP) for the production of Indonesia's first passenger jet.
The agreement was signed by State Minister of Research and Technology B.J. Habibie, who also heads IPTN, and DSTP president Saadillah Mursjid, who is also State Minister/Cabinet Secretary.
Under the agreement, DSTP will provide US$2 billion for IPTN to design, develop and produce two types of N-2130 passenger jets and obtain at least three international certifications for the aircraft, including from the United States and Japan, Saadillah said.
"After the N-2130 is sold, PT DSTP will get a royalty from the sales," he said, adding that the size of the royalty was yet to be negotiated with IPTN.
The N-2130, the second airplane to be designed and engineered entirely in Indonesia, is scheduled to undergo its maiden flight in 2004 and enter the market by 2006. The first locally designed plane, the N-250 turboprop passenger plane, had its maiden flight in August last year.
To raise the needed $2 billion, DSTP has been selling two million shares worth $1,000 each. Saadillah said DSTP had so far raised $400 million from the sales of 400,000 shares to the public, 25 percent of which were bought by individuals.
Saadillah added that only Indonesians and national entities could buy DSTP shares.
"Foreigners are not allowed to buy DSTP shares because only Indonesians and local legal entities have the right to buy them," he said.
He was optimistic about selling the two million DSTP shares entirely to national investors, considering that Indonesia has some 200 million people.
"Obviously, babies, children and very old people are not among the potential buyers of the DSTP shares," he said.
Habibie shared Saadillah's bullish view, recalling the suggestion from Soeharto, the chief commissioner of DSTP, that the company give priority to Indonesians and domestic legal entities in selling shares.
He added that several foreign insurance firms had actually expressed interest in acquiring DSTP shares.
"In 2006 (when the N-2130 enters the market), the DSTP share price would increase three or even four times from its current par value," Habibie said.
Soeharto set up DSTP on Feb. 16 to support the realization of the N-2130, an Indonesian-designed passenger jet project which will be able to carry 100 to 130 passengers, depending on the type.
Habibie said the 100-seater version of the N-2130 will cost $20.5 million and the 130-seater version, $26.65 million.
He said to break even, IPTN has to sell 326 aircraft, adding that half of that number would be absorbed by the domestic market.
Habibie said IPTN plans to cooperate with industries in neighboring areas, such as in Australia and Southeast Asia, to manufacture components for the jet.
Habibie estimated the world would need some 3,200 units of 100- to 130-seater passenger planes between the years 2005 and 2025.
The N-2130 jet, according to Habibie, would meet about 25 percent of the world demand for aircraft of its class because only three other foreign firms -- Airbus, Boeing and McDonnell- Douglass -- are producing similar planes.
"We are convinced that the N-2130 will be able to grab a 25 percent market share because of its most up-to-date design and technology," Habibie said. (rid)
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