PT Astra's debt proposal meets creditors' approval
PT Astra's debt proposal meets creditors' approval
JAKARTA (JP): Local auto giant PT Astra International on Friday reached agreement with its overseas bondholders on a proposed US$1.1 billion debt-restructuring plan.
Astra said in a statement that it held three successive bondholders' meetings in Singapore for three types of U.S. dollar-denominated bonds totaling $450 million.
Bondholders voted overwhelmingly to accept the debt- restructuring plan.
The vote came two weeks after Astra's bank creditors endorsed the move. The strategy is being closely watched as a possible benchmark for scores of Indonesian companies struggling to survive under foreign debt burdens after the collapse of the rupiah in 1997.
Bondholders failed to approve the plan at a meeting held in late April. Because the last meeting did not have a quorum -- 75 percent of bondholders -- Friday's meeting only required 25 percent of bondholders present to form a quorum.
With this latest decision, Astra has reached agreement with creditors on 99 percent of its total outstanding debt.
Astra president Rini M.S. Soewandi said she appreciated the creditors and bondholders' approval on the company's debt restructuring program.
"We are very grateful that our proposal received full support from one of our stakeholders, our creditors, who have continuously supported the success of the company.
"They believe in the company's long-term business growth and recovery from the economic crisis plaguing the region, including Indonesia in the near future," she said.
Rini said several holders of rupiah-denominated bonds failed to show up at the meetings.
"It has been difficult to identify and locate these bondholders due to fast and active trading of the bonds."
Nevertheless, Rini said the company would continue to strive to contact all creditors, including holders of rupiah bonds, to support its debt restructuring plan.
Astra, once one of Indonesia's most profitable and well- managed conglomerates, was saddled with financial problems following the fall of the rupiah in mid-1997.
Car sales, previously a core income earner, significantly dropped in 1998, and are expected to decline further in 1999 as Indonesia's economy remains stagnant.
Total Astra loans under the debt restructuring program, including capitalized interest, are $1 billion and Rp 1 trillion, about 60 percent of which are in the form of bank loans, both in the U.S. dollar and rupiah, with the remaining in dollar and rupiah-denominated bonds.
Under its restructuring plan, debt will be divided into three tranches, with the first tranche totaling $200 million and Rp 235 billion (21 percent of the debts), the second tranche $647 million and Rp 760 billion (68 percent) and the third tranche $100 million and Rp 117 billion (11 percent).
Astra offers a three year repayment period for the first tranche, with full interest payments and a one-year grace period of principal payments.
The second tranche has a six year repayment period, with a six-month grace period for interest payments and a three-year period of principal payments.
The third tranche comprises seven-year zero coupon loans or bonds, with warrants. Astra plans to issue warrants that will be converted into shares amounting to more than 10 percent of the company's issued share capital.
With the debt restructuring plan now approved, Astra will begin selling off subsidiaries and non-core assets to generate funds to service interest payments. The company plans to sell off assets worth Rp 3 trillion over three years to support the debt restructuring plan. (rid)