Shareholders support Astra debt resolution

Shareholders support Astra debt resolution

JAKARTA (JP): Shareholders of local auto giant PT Astra
International approved on Tuesday the company's resolution to
restructure its US$1.1 billion debt.

Shareholders also approved an Astra management decision to
disburse Rp 477 billion ($61.2 million) to recapitalize its
listed Bank Universal.

The approval on debt restructuring at the company's annual
shareholders meeting came after the majority of Astra's creditors
voted to support the company's debt resolution plan.

Astra president Rini M.S. Soewandi said the company was
looking for 100 percent approval from its creditors for its debt
restructuring plan to have a strong basis for the program to
proceed.

"We have received full support from the shareholders to
restructure debts. And 99.16 percent of our creditors have
approved our proposed debt restructuring program.

"We still want to get 100 percent creditor approval. But if we
don't get 100 percent, we will go to the Central Jakarta
Commercial Court for ratification which will then bind all
creditors."

According to Rini, the 1998 Bankruptcy Law stipulates that a
debt restructuring decision can be ratified whenever it is
approved by half of the creditors, who represent at least two-
thirds of the outstanding debt.

Astra said its bank creditors, who account for 60 percent of
Astra's outstanding debt under restructuring, and holders of
dollar-denominated bonds had voted for the company's debt
restructuring proposal.

However, due to technical matters, several holders of rupiah-
denominated bonds failed to show up at the bondholders meetings.

Nevertheless, Rini said the company would continue to strive
to get all creditors, including holders of rupiah bonds, to
support its debt restructuring.

Total Astra loans under the debt restructuring program,
including capitalized interest, are $1 billion and Rp 1 trillion,

Under its restructuring plan, debt will be divided into three
series, with the series one totaling $200 million and Rp 198.9
billion, series two $705.4 million and Rp 701.7 billion and
series three $100 million and Rp 99.4 billion.

Astra offers a three year repayment period for the first
series, with full interest payments and a one-year grace period
for principal payments.

The second series has a six-and-a-half year repayment period,
with a three-year principal payment period.

The third series comprises seven-year half-secured loans or
bonds, with warrants. Astra plans to issue warrants that will
convert into shares amounting to 10 percent of the company's
issued share capital.

After the fifth year, Astra's debt should reduce to 50 percent
of current outstanding debts.

Rini said management also received shareholder approval to
raise a maximum of Rp 3 trillion from Astra's fixed-asset sales
to be used to repay debt over the next three-and-a-half years.

However, Rini said, if the company's car revenue improved
within the next three years, Astra would reduce the amount of
assets it must sell.

Astra, once one of Indonesia's most profitable and well-
managed conglomerates, was saddled with financial problems
following the fall of the rupiah's value in mid-1997.

The company has experienced difficulties paying off its debt
following the rupiah's sharp depreciation. (udi)