Skip navigation
Newswire

Astrasells plywood unit, may help on debt

JAKARTA, Aug 19 (Reuters) - Indonesia auto giant PT Astra International said on Monday it has sold plywood unit PT Sumalindo Lestari Jaya for 13.98 billion rupiah ($1.6 million) to focus on its core business.

Some analysts said the sale was positive to Astra by reducing somewhat its hefty consolidated debt burden of some $1.6 billion. Last month the company said it was still in the selling process.

Sumalindo had total assets of 1.6 trillion rupiah and posted a higher net loss of 352 billion rupiah in 2001 from 316 billion in the previous year. It had around $140 million in debts as of the end of 2001.

"Astra agrees to sell all its stake of 74.56 percent in Sumalindo to PT Sumber Graha Sejahtera for 13.98 billion rupiah," Astra said in a statement. The buyer is a local company.

By afternoon trade, Astra -- 32 percent owned by Singapore's Cycle & Carriage Ltd -- was trading up 1.59 percent at 3,200 rupiah, helped partly by a stronger rupiah currency.

Astra is in the process of restructuring its debts for the second time amid a lack of cash to repay loans maturing this year and next, which has helped weighed down the share price.

It has said it would propose several schemes under a debt workout proposal drawn up by its financial adviser Rothschild including rescheduling, a rights issue or debt buyback.

Analysts have said Astra is likely to restructure only its outstanding debts at the parent level which are estimated at around $726 million and 881 billion rupiah. ($1=8,820 rupiah)