Sat, 12 Feb 2000

IRC-led investor group in hunt for Astra stakes

JAKARTA (JP): Hong Kong-based fund management company Indonesian Recovery Company Co. (IRC) has placed a bid with the Indonesian Banking Restructuring Agency (IBRA) to acquire IBRA's 45 percent stake in PT Astra International.

IRC director Robert Appelby said on Friday that IRC represented a consortium of investors interested in the country's largest automaker. He declined to name the other investors.

"We're looking for an interest from the sale by IBRA, which is about 45 percent of Astra's shares," Appelby, also a commissioner at PT Transindo Multi Prima, said after announcing Transindo's bid to acquire ailing cigarettemaker PT Bentoel Prima.

Appelby said IRC was offering between Rp 3,500 to Rp 4,500 per Astra share, but said it could be increased if other investors placed a higher bid.

"It will depend largely on the due diligence process, we're currently looking at Astra's business," Appleby said.

IRC was founded last year by Hong Kong-based debt investment manager Asia Debt Management and Indonesia's investment bank PT Bhakti Investama to buy corporate debt and tradable assets in Indonesia.

Bhakti Investama is one of three listed investment banking firms in Indonesia offering services in merger and acquisition activities, financial/debt restructuring and investment services.

Bhakti Investama has cooperated with the Quantum Fund of U.S. financier George Soros and often represents the company's interests in Indonesia.

Asia Debt Management, with fund assets of US$450 million, offers investors the opportunity to participate in distressed and high-yielding Asian debt.

Appleby, also a director at Asia Debt Management, said that IRC was established specifically to facilitate investors interested in betting their money in Indonesian assets.

"So far we have invested some $100 million in Indonesia," he said.

Asked about IRC's chance of winning IBRA's Astra stake, Appleby expressed confidence.

"We're carefully studying the competition, but we have a good chance in winning the process," he said.

A number of other investor group have expressed their interest in acquiring IBRA's 45 percent stake in Astra after IBRA's preliminary agreement with a U.S. investor group, led by Gilbert Global Equity Partners and Newbridge Capital Ltd, fell through.

Among other parties reportedly interested in Astra are Lazard Asia Fund together with Credit Lyonnais Securities Asia (CLSA) and Philippine businessman John Gokongwei with his financial adviser, Goldman Sachs Group Inc.

JG Summit Holdings Inc., Gokongwei's flagship company, denied on Wednesday it was planning to buy the Astra shareholding.

Lazard Asia Fund, a unit of Lazard Freres and Co., confirmed on Thursday it was preparing to bid for IBRA's Astra stake.

Lazard Asia denies that the group will include ousted Astra chief executive Rini Soewandi.

Market talk in Jakarta has linked Rini, who was unseated Tuesday at a shareholders meeting called by IBRA, with Lazard and CLSA.

"We are interested in Indonesia strictly as an investor," Patrick Cheung, chief executive officer of Lazard Asia, was quoted by Dow Jones Newswires as saying.

Rini is not financially involved in the Lazard bidding group, which is keeping an open mind on Astra's future management if it were to buy IBRA's stake, he said.

In a letter sent last month to IBRA chairman Cacuk Sudarijanto, CLSA said it was advising an investment group that was able to quickly conduct due diligence on Astra, because of the "substantial work that has already been completed".

CLSA's emphasis on a fast turnaround in its bid came as a rival consortium selected as preferred bidder found itself at loggerheads with Rini's management team.

The Gilbert/Newbridge consortium complained that Astra had blocked its bid by refusing to open its books, a claim denied by Rini.

An executive close to the Newbridge investor group said earlier this week it had yet to decide whether to renew its proposal or submit a new one.

IBRA has said it will accept bids from interested investors up until Feb. 23, when the agency will publish a shortlist of bidders.

A week after Feb. 23, those on the shortlist will have the opportunity to conduct due diligence on the company, and place final bids by March 20.

IBRA's Cacuk said Monday that five bids have already been filed for the Astra stake, adding that he expected more. (03/rid)