New investor CCL plans no shake-up in Astra International
New investor CCL plans no shake-up in Astra International
JAKARTA (JP): The new investor in PT Astra International has no immediate plans for a management shake-up of the country's largest automotive company but has prioritized debt payment, Astra's president Theodore Permadi Rachmat said on Friday.
"They said they had no intention to change the management. They only asked us to work hard and pay our debts," Rachmat said of the results of his recent meeting with Philip Eng, the managing director of Singapore's Cycle & Carriage Ltd. (CCL), the publicly listed firm's new majority shareholder.
CCL, an automotive distributor, led the investor consortium in buying 39.5 percent of Astra from the Indonesian Bank Restructuring Agency (IBRA) in bidding last week.
The winning consortium bought all of IBRA's 1.02 billion Astra shares at Rp 3,700 per share, providing the agency with some US$506 million in cash, based on the Rp 7,460 rate used for the deal.
The consortium includes Batavia Investment Management Ltd., Lazard Asia Fund, a unit of Lazard Freres, PT Bhakti Investama and the Government of Singapore Investment Corp.
CCL is the largest investor with an estimated 23 percent stake in Astra.
Rachmat said CCL also did not plan to implement corporate restructuring of Astra.
"They want us to maintain all the businesses we have now. They have no grand design for us. What they want is profitability."
Rachmat said the new investors wanted to place six people on the board of commissioners, three of whom would replace commissioners appointed by IBRA, namely Mardi Sutanto, R. Sumantri and Mahmudin Jasin. AR Ramli will remain the president commissioner.
He said the appointment of the new commissioners would be part of the agenda in the company's next shareholders meeting scheduled for the end of May.
The additional three commissioners would bring to 12 the number of members of the board.
Rachmat said the acquisition of Astra by the new investors would bring financial stability to Astra and the company could also benefit from the network of new investors to expand its business.
Rachmat said he was optimistic that Astra would be able to pay its debts due this year, predicting the company would exceed last year's net profit of Rp 808 billion ($107 million) this year given the increasing positive trend in automotive sales.
Rachmat said Astra's total debt was $500 million.
"Our Rp 800 billion net profits for the last year included earnings from the sale of assets and foreign exchange earnings. This year, we shall get higher profits without selling any assets."
Astra projected domestic car sales at 240,000 this year, a 150 percent increase from 94,023 last year, Rachmat said. He added that Astra products would account for between 50 percent and 55 percent of the sales.
The company also projected domestic motorbike sales would reach 700,000 this year, up 43 percent from 487,759 last year
"The rise in car and motorbike sales indicate early signs of the country's economic recovery," Rachmat said.
Astra is also active in agribusiness, banking and information technology.
IBRA sold its stake in the firm in order to meet its revenue target of Rp 17 trillion by March to aid the state budget.
CCL consortium outbid a U.S. consortium led by Newbridge Capital which included Chase Asia Equity Partners, PT Nusantara Investment Fund and PT Saratoga Investama Sedaya, a company partly owned by Edward Soeryadjaja, the son of Astra's founding William Soryadjaja. (jsk)