Marubeni agrees to buy Indomobil bonds

Marubeni agrees to buy Indomobil bonds

JAKARTA (JP): Marubeni Corporation, a major Japanese trading
house, has agreed to buy convertible bonds worth US$100 million
from PT Indomobil Investment Corporation, the holding company of
the Salim Group's automotive division.

An assistant to Indomobil's managing director, Freddy
Sutrisno, said here yesterday that his company will use the
proceeds from the convertible bond issuance to finance its
expansion projects, which will include the modernization of its
production facilities, the expansion of its production capacity,
the strengthening of its marketing networks and the improvement
of its after-sale service capability.

Indomobil controls 70 companies operating in the assembly and
distribution of Suzuki, Hino, Mazda, Nissan and Volvo vehicles.
It gained a 20 percent share in the Indonesian automotive market
in 1994.

Freddy said the convertible bonds, with a maturity period of
three years, offer an interest of 3.5 percent per year which will
be paid every six months.

The issuance of the convertible bonds for Marubeni under the
agreement, signed here on Wednesday, is a step toward the
realization of Indomobil's plan to offer new shares to the public
in late 1996 or early 1997, he said.

Under the agreement, "Marubeni may convert the bonds into
ordinary shares of Indomobil when it's go-public plan is
realized," he explained.

An industrial source said that if the Indomobil bonds are
converted into equity, Marubeni will hold a stake of about 25
percent of Indomobil.

Marubeni will also continue regular discussions with the Salim
Group on expanding their alliance to include the heavy electrical
and telecommunications business, the spokesman said. (riz)