PT Astra issues Euro bonds

JAKARTA (JP): PT Astra International, the country's largest automaker, announced yesterday that it has issued US$200 million of Euro bonds through its subsidiary, Astra Overseas Finance B.V., on the Luxembourg Stock Exchange.

Legal documents of the bonds issuance will be signed here today by Astra as the issuer and guarantor, and ING Barings and SBC Warburg as lead managers.

Astra said yesterday that the bonds have a tenure of seven years with a fixed interest rate of 8.75 percent per annum.

Astra's president TP Rachmat said that 60 percent of the total proceeds will be used to refinance Astra's short-term debts. No details were available for the remaining 40 percent.

Rachmat did not explain whether the bonds, which were issued on July 11, were fully subscribed or not.

He, however, said "We got a positive response from foreign investors when we conducted a road show to several major cities including Tokyo, Seoul, London, Frankfurt and New York."

Commenting on Astra's performance, Rachmat said "We realized that competition in the auto market is going to be very tight this year but we will try to boost the company's sales and profit, or at least not to let them drop below last year's figures."

He also estimated that domestic car sales will drop by 10 to 15 percent this year due to buyers's wait-and-see attitude related to the upcoming entry of new cars, claimed to be the cheapest sedans ever to be sold in the country.

"But it's only temporary. I'm optimistic that starting from next year, car sales will grow very fast," he said. "We are also optimistic that we can sell up to 600,000 cars per annum before the year 2000."

"It's true that competition is tough but automotive business is till promising. And Astra will try to maintain its market share," Rachmat added.

He said that in the first six months of this year, Astra sold 77,266 vehicles or 50,2 percent of domestic car sales.

Astra International was founded in 1957 by William Soeyadjaya and the late Tjia Kian Tie. It is now a major diversified investment holding and operating company with significant interest in a number of important sectors of the economy, mainly in the automotive industry. (alo)