Soeryadjaya family returns to Astra
JAKARTA (JP): After an absence of eight years, the founding family of PT Astra International marked on Tuesday its return to the company with the appointment of Edwin Soeryadjaya as an Astra commissioner.
Philip Eng Heng Nee, the managing director of Cycle & Carriage Group, which owns 29 percent of Astra, said the appointment of Edwin was to honor the company's founding family.
"We're sure that he will play a contributing role as a commissioner," Eng said in a press meeting.
However, he declined to say whether Edwin had acquired a stake at Astra prior to his appointment as commissioner.
Edwin, through the Newbridge Capital led consortium, tried to purchase in March a 39.5 percent stake at Astra, offered by the Indonesian Bank Restructuring Agency (IBRA).
The consortium lost the bid to Cycle & Carriage, which bought IBRA's 1.02 billion Astra shares at Rp 3,700 per share or about US$506 million.
Eng, also a newly appointed Astra commissioner, said that Cycle & Carriage had talked with Edwin on several occasions before outbidding Edwin's consortium.
"Unfortunately, there wasn't a way we could come together to bid for Astra," he said.
He added that Edwin's appointment was of value due to the latter's good understanding of Astra.
Edwin was Astra vice president from 1978 to 1993.
"We think we can rely on him to contribute," Eng added.
William Soeryadjaya, the founder of Astra in 1957, was forced to sell his company in 1992 to settle the debts of the now defunct Bank Summa, which his eldest son Edward owned.
Astra was then controlled by a group of shareholders, among others the Nusamba Group, Bank Danamon and Bank Central Asia. The public owns some 31 percent.
Following the economic crisis, the government took over the debts of several of Astra's shareholders, thereby placing Astra's shares under IBRA.
Astra reported debts amounting to US$1.5 billion, which weighed heavily on the company with the sharp depreciation of the rupiah.
However, Eng assured that the current level of about 8,000 to 8,500 rupiah against the US dollar was still tolerable.
"As long as the economy maintains its current level, we should be able to get through," he said.
Eng said thus far there were no plans for a rights issue to pay down its debt.
"Whether we will have a plan for a rights issue or not, we'll have to wait until August," he said.
He also saw no plans for divesting any of the company's widely diversified subsidiaries.
"There won't be any major divestment," he said,
He added that Astra was only looking at divesting the company's small garment and leather factories, which he described as raising small money.
Aside from manufacturing cars, Astra is also active in agribusiness, banking and information technology.
Astra president Theodore Permadi Rachmat estimated that the rupiah depreciation would cause the company to reach only a break even point for the first quarter of this year.
The company earlier projected domestic car sales to reach 240,000 this year, a 150 percent increase from 94,023 last year. Astra would account for between 50 percent and 55 percent of the sales, the company said.
The general shareholders meeting approved Astra's 1999 annual report, which recorded a net profit of Rp 1.4 trillion as against Rp 2.5 trillion in losses 1998.
The meeting approved that no dividend be paid this year and that all of 1999 profit would be used to cover last year's loss.
Aside from Edwin and Eng, Astra also appointed four new commissioners from the Cycle & Carriage Group, Tan Sri Dato Paduka Sallehudin Bin Muhammad, Anthony John Liddell Nightingale, Neville Barry Venter and Vimala Menon.(bkm)