Singapore's CCL wins Astra stake

Singapore's CCL wins Astra stake

JAKARTA (JP): An investor consortium led by Singapore's
automotive distributor Cycle & Carriage Ltd. (CCL) finally won on
Friday the bid for the Indonesian Bank Restructuring Agency's
(IBRA) 39.5 percent stake (1.02 billion shares) in publicly
listed PT Astra International.

The winning consortium will buy all of IBRA's 1.02 billion
Astra shares at Rp 3,700 per share, providing the agency with
some US$506 million in cash, based on the Rp 7,460 rate used for
the deal.

"This is a landmark transaction for Indonesia. This is also
IBRA's largest transaction (so far)," IBRA chairman Cacuk
Sudarijanto said at a news conference after announcing the
winner.

"The price was the only consideration in picking the winner,"
he added.

The CCL consortium includes Batavia Investment Management
Ltd., Lazard Asia Fund, a unit of Lazard Freres, PT Bhakti
Investama and the Government of Singapore Investment Corp.

CCL will be the largest investor with an estimated 23 percent
stake in Astra.

The consortium outbid the U.S. Newbridge Capital-led
consortium which included Chase Asia Equity Partners, PT
Nusantara Investment Fund, Batavia Investment Fund and PT
Saratoga Investama Sedaya, a company partly owned by Edwin
Soeryajaya, the son of Astra's founder, William Soeryajaya.

Cacuk declined to mention the price offered by the second
bidder. "They offered a price lower than Rp 3,700."

But a source said that the Newbridge consortium offered Rp
3,600 per share.

Many had earlier expected that Newbridge would win the bid,
particularly as it had offered Rp 3,750 in an attempt last
December to buy Astra.

Cacuk sidestepped a question as to why IBRA could only get Rp
3,700 for the Astra shares, saying, "To IBRA this (Rp 3,700) is
already the best price."

Separately, IBRA senior vice chairman Arwin Rasyid said that
for the government the Rp 3,700 price was an "upside value"
considering that the average market value of Astra in February
was about Rp 3,600 per share.

Cacuk stressed that the completion of the Astra transaction
would send a positive signal to foreign investors that the
government was serious about its asset disposal plans, and that
Indonesia could conduct transactions in a transparent way.

IBRA holds some Rp 600 trillion worth of assets. The agency is
targeted to raise about Rp 17 trillion in the current budget year
ending this month, and almost Rp 19 trillion in the next April-
December 2000 budget year. The proceeds will be used to aid the
state budget.

Separately, CCL managing director Philip Eng said that the
group intended to be a long-term investor in Astra.

"Cycle & Carriage is committed to serving as a long-term
partner with Astra. We are confident of the prospects for Astra
under its current management."

Eng added that he felt "comfortable" with current Astra
president Theodore P. Rahmat, a nephew of William Soeryajaya, who
lost the company in 1993 in a bid to repay the obligations of the
family's bankrupt bank.

He asserted that the Soeryajaya family did not participate in
the CCL consortium.

Eng declined to disclose his company's grand vision for Astra.
"This will be developed over time as we develop our relationship
with Astra and its management."

Asked why CCL decided to submit a joint bid with the Lazard
Freres-led consortium, he said, "When two bidders joined together
it definitely improved the chances of success. That's what we did
and that's what we achieved."

CCL and Lazard Freres were shortlisted last month as two
separate bidders.

CCL is a regional grouping with core businesses in motor
vehicle distribution and retail, and property investment and
development.

Since starting in 1951 with a Mercedes Benz franchise, CCL has
grown to handle many franchises in six countries.

Equity analysts generally welcomed the entry of Cycle &
Carriage into Astra.

PT SG Securities Indonesia's head of research Lin Che Wei said
that CCL would create more value for Astra.

"The joining of Cycle & Carriage can very well be a value
creation for Astra," Che Wei said.

PT Nomura Indonesia's head of research Goei Siauw Hong was not
so enthusiastic about the synergy to be created between CCL and
Astra, pointing out that the former was merely a car distributor
company with its main operation in Singapore, a small business
area.

"In Singapore, you may have control of the market with only
two car outlets. It's not so here in Indonesia."

"But with Cycle & Carriage's controlling shareholders in
Astra, they can apply stricter discipline to the management."

Goei was specifically disappointed with the price deal
received by IBRA, pointing out that the Rp 3,700 price level was
below the market price of between Rp 3,700 and Rp 3,800 before
the deal was closed.

He said that a controlling investor should offer a 25 percent
premium of the market value. (rei/udi)