PT Astra Otoparts to sell 75m shares to the public

JAKARTA (JP): PT Astra Otoparts, a unit of PT Astra International, plans to offer 75 million shares or 10 percent of the company's total enlarged capital to the public next month despite the gloomy outlook for the country's capital market.

Yannes Naibaho, president of PT UsahaBersama Securities, the lead managing underwriter for the company's initial share offering, said yesterday that the company's shares, each with a par value of Rp 500 (6 U.S. cents), would be sold for between Rp 550 and Rp 600 per share.

"Despite the sluggish market, some big investors have expressed an interest in buying Otoparts stock," he told journalists.

He said the company expected to raise between Rp 40 billion and Rp 45 billion from the public.

Company president Danny Walla said that 70 percent of the proceeds would be used to increase the working capital of three of its 28 subsidiaries, and the other 30 percent to pay off company debts.

The three subsidiaries set to get a capital injection are PT Nusa Progress Indonesia, PT Menara Terus Makmur and PT Cipta Piranti Teknik.

Company finance director Benny Redjo said the company recorded a total net profit of Rp 41 billion in 1997, down from Rp 57 billion in 1996.

He attributed the decline in the net profit to huge foreign exchange losses worth Rp 61 billion by the end 1997.

The company's total foreign exchange debts were worth US$94.5 million by the end of 1997, he said, with around 70 percent hedged at Rp 2,700 rupiah per U.S. dollar.

He said the company recorded total sales of Rp 829 billion last year, up from Rp 638 billion in 1996.

Benny said the company expected to book a meager net profit of Rp 14 billion this year due to the mounting foreign exchange losses and the bleak market outlook for the country's automotive industry.

"Everybody in the industry is feeling the pinch of the crisis," he said.

However, the company expected to book net sales of Rp 1.1 trillion this year due to increasing export sales.

He said export sales accounted for around 28 percent of the company's 1997 sales and that export sales were expected to make up 47 percent of the company's sales this year.

"We will continue to boost our export market," he said.

However, a change in government policy on the automotive industry and high interest rates, compounded by the rupiah's continuing depreciation against the U.S. dollar would make it extremely difficult for the company to perform up to expectation this year, he said.

Astra Otoparts, set up in 1991, produces and distributes car and motorcycles components for the domestic and overseas markets. (aly)