Kwik supports IBRA bid to replace Astra management

Kwik supports IBRA bid to replace Astra management

JAKARTA (JP): Kwik Kian Gie said here on Thursday he supported
IBRA's bid to replace the management of publicly-listed PT Astra
International in order to push through the sale of its 40 percent
stake in the company.

But the coordinating minister for the economy, finance and
industry added that he would summon Indonesian Bank Restructuring
Agency chief Cacuk Sudarijanto to question him about the reported
second bidder for the agency's stake in Astra.

Cacuk did the right thing, Kwik said at the House of
Representatives, referring to IBRA's request that Astra's
extraordinary shareholders meeting on Feb. 8 replace the
company's Rini Soewandi-led management team.

IBRA has accused Astra's management of obstructing the
planned sale of its equity shares in the company to an American
investor consortium led by Newbridge Capital and Gilbert Global
Equity Capital Asia Ltd.

"Yes, it does," Kwik added, replying to whether his support of
IBRA also included its bid to unseat the Astra management and
replace it with a team more cooperative to IBRA's planned sale to
the investor consortium.

Separately, Cacuk was quoted as confirming on Thursday that
Newbridge/Gilbert consortium had been required to
pay upfront around Rp 1 trillion or 30 percent of the purchase
price of the IBRA stake in Astra into an escrow account as a
downpayment to support its commitment.

Cacuk told news conference on Wednesday that he would push
ahead with the bid to replace Astra's management in order to
speed up the sale of IBRA's equity in the country's largest car
company.

Cacuk added that IBRA was under great pressure to meet its
target of raising at least Rp 17 trillion (US$2.36 billion) from
the sale of assets under its control during the current fiscal
year ending in March.

The Astra management has repeatedly denied IBRA's allegations
that it is attempting to thwart the agency's deal with the
investor consortium, saying that it merely wants the transaction
to be transparent and within the rules governing the securities
market.

According to a letter sent this week by Credit Lyonnais
Securities (Asia) Ltd. (CLSA) to Cacuk, an unnamed "respected
blue chip financial investor" was offering to pay a premium on
IBRA's minimum stated price of Rp 3,750 a share for its stake in
Astra.

The letter promised a speedy conclusion to the matter if IBRA
agreed to sell its stake in Astra to this second bidder.

The new bidder is promising to work with, not against, Astra's
management to ensure a quick asset sale and is offering to
support Astra's planned rights issue, according to the letter,
which Dow Jones Newswires obtained.

CLSA says its client can carry out a due diligence on Astra
within two weeks of signing a purchase agreement with IBRA, due
to the substantial work that has already been completed.

Cacuk also confirmed on Thursday that he had received the
letter from CLSA.

But he said he did not find in the letter any better offer
from CLSA like what was reported in the media.

CLSA, he said, even refused to simply name the real investors
behind it unless IBRA made a strong commitment to selling its
stake to them.

"Then I asked them (CLSA), 'Is it ethical for IBRA to first
break up its deal with Newbridge, only so that you would tell me
who are behind you?'," Cacuk said.

Nevertheless, Cacuk said any new offer would be welcomed. Any
new investors interested in the IBRA Astra stake could present
their bids when the government opened the second round of bidding
for Astra shares.

Newbridge/Gilbert has accused the Astra management of
obstructing a due diligence it intended to conduct on the company
as part of its deal with IBRA.

Astra's management denied it was hindering the due diligence,
saying it only wished to ensure it conformed with securities
market rules and other regulations.

CSLA is one of two foreign banks vying to advise Astra on its
planned rights issue, thus giving its unknown bidder a head start
on a full assessment of the company's financial position. The
other bank is ING Barings.

The unnamed investor is also willing to pay IBRA for roughly
half of its Astra shares now and the remainder at a later date,
CLSA said.

Under its agreement with IBRA, Newbridge/Gilbert will pay only
Rp 3,000 per share if it purchases less than 30 percentage points
of the agency's stake.

Astra is considered the jewel among the Rp 600 trillion in
equities and bad debts under IBRA's control, and the successful
sale of the Astra shares to a foreign investor is seen as crucial
to enticing more investors to buy assets from the agency.

IBRA has also said at least three new investors are interested
in the Astra stake, but Newbridge was named the preferred bidder
because it offered the highest price.

According to the agreement signed by IBRA and the
Newbridge/Gilbert consortium, the investor group is entitled to a
breakup fee of up to $1.5 million if the deal falls through.
(rei/rid)