SIA confirms talks with Sempati Air

SIA confirms talks with Sempati Air

SINGAPORE (AFP): Singapore Airlines Ltd. (SIA) confirmed
yesterday that it was engaged in talks to acquire a stake in
Indonesia's private carrier Sempati Air, but said a deal had not
yet been finalized.

SIA spokesman Rick Clements said in a statement that talks had
taken place with Sempati on "an equity-based relationship and
these discussions are continuing."

"As an ongoing activity, SIA, like many other airlines around
the globe, regularly explores commercial opportunities near and
far," the statement said. "Some of these may or may not
materialize."

The statement said it was the airline's policy not to disclose
in public the nature of such discussions "until we are ready to
do so," and gave no further details on the talks with Sempati.

Bisnis Indonesia daily reported yesterday that SIA was to take
a stake in Sempati Air.

Mohammad (Bob) Hasan, chairman of the Nusamba foundation which
is one of Sempati's shareholders, was quoted as saying that the
SIA managing director "has already had talks with us about this."

He said other foreign airline companies had also approached
Sempati, but declined to name them. The stake would be taken up
by way of a private placement, Hasan said.

At present, Sempati is 15 percent owned by the Humpuss Group,
20 percent by Nusamba, 25 percent by PT Tri Ubaya Sakti, and 40
percent by Asia Aviation Inc., a Malaysia-based company.

How the share capital will be redistributed has not been
specified.

Government-controlled rating agency PT Pefindo last week
placed Sempati on a "rating alert" based on the company's recent
deteriorating financial performance.

Pefindo also said problems within Sempati were one of the
"factors contributing to the delay of PT Sempati Air's IPO
(initial public offering), which was originally scheduled to be
executed in October 1996."