Skip navigation
Newswire

Jakarta checks Astra trading on sharp price swings

By Lily Kurniawati

JAKARTA, Nov 26 (Reuters) - The Jakarta Stock Exchange said on Tuesday it is investigating recent stock transactions of Indonesia's leading car maker PT Astra International following sharp price swings.

Shares of Astra have been on a roller coaster since the company announced a plan early last week to raise up to 1.5 trillion rupiah ($167 million) through a rights issue to help repay its hefty debts.

Astra, 32 percent owned by Singapore's Cycle & Carriage , dropped 6.80 percent to close at 2,400 rupiah on Tuesday, recovering partly after plunging 13.59 percent earlier as a key creditors meeting fell through.

Astra's shares had rallied some 71 percent in the last five days helped by speculation the company would gain creditors' approval of its $820 million debt restructuring plan, helping lift one cloud hanging over the company and paving the way for the rights issue. "The Jakarta Stock Exchange is investigating Astra share transactions after the rights issue announcement and in connection to recent sharp price fluctuations," the bourse's chief, Erry Firmansyah told reporters.

News of details of the planned issue had initially sparked a dive in Astra shares last week, on fears the issue price would be well below market levels, but heavy buying then emerged to push the stock higher.

On Tuesday an Astra creditors meeting in Singapore, aimed at winning lenders' approval of its debt restructuring plan, broke up due to the lack of a quorum and the company said it planned to call another meeting next month.

"We did not get sufficient lenders to achieve a quorum for the meeting today. We are very optimistic that we will be able to call another meeting in December and achieve the quorum and a positive vote at that meeting," John Slack, a director at Astra, told reporters. It is the second time in three years Astra has sought to restructure debts due to lack of cash to meet maturing loans.

Earlier this month, Astra said it has reached agreement with six major creditors, who together hold 30 percent of Astra's outstanding debt, on the restructuring plan.

But the company needed the support of other lenders to reach a two-thirds majority before the plan can become effective.

The proposed debt workout extends the repayment period to 2009 from 2006, and halves the amount the company will repay in principal over the next three years. ($1=8,990 rupiah)