Corporate News in Brief

CORPORATE NEWS IN BRIEF

October 2008

GM SET TO CONTINUE EXPANSION PLAN IN INDONESIA. PT General Motor Auto World Indonesia (GMAWI) said it will continue plan to to expand its factory in Pondok Ungu, Bekasi, but implementation would be more careful amid the global financial woes. The car making giant General Motor through GMAWI is set t make Indonesia a production base in Southeast Asia to cover the regional market. Fore that purpose GM will reoperate its old assembling plant in Ponsok Ungu, Bekasi for which it would need additional investment of US$30 million. Managing Director of PT GMAWI Mukiat Sutikno said there has been no change in the plan to expand the factory. The crisis in the United States would not affect the plan to revitalize the factory. The factory will have an annual production capacity of 20,000 units of cars. So far the company imports GM cars from Thailand to be sold in the country.

INDIKA ENERGY TO ACQUIRE BHP KENDILO. PT Indika Energy Tbk will acquire coal producer PT BHP Kendilo Coal Indonesia. The process of acquisition is expected to be completed before the end of this year. The acquisition will cost around US$20 million but additional investment of US$80 million will be needed to develop the mine, which is currently left idle. Vice President & Investor Relations of Indika Energy Retina Rosabai said the mine is expected to be operational by the end of 2010 or early 2011 with a capacity of 700,000 tons a year. BHP Kendilo was established as a joint venture between BHP (80%) and Mitsui (20%). The company operates in Petangis and Rindu in East Kalimantan. BHP Kendilo is a holder of the first generation coal contract, which is given a generous tax facility by the government .

LOTTE GROUP ACQUIRES MAKRO INDONESIA. South Korean retail giant Lotte Group has acquired Makro wholesale unit in Indonesia . The Lotte Group has signed a sale and purchase agreement to acquire the entire shares of PT Makro Indonesia. A spokesman of SHV Holdings N.V. (SHV) , which owns Makro Indonesia Joost Van Klink said a number of world's retail giants indicated interest in acquiring the Makro unit in Indonesia including Tesco, Casino and Carrefour but the Lotte Group came as the winner after going through a process of selection . Under the sale and purchase agreement the Lotte Group will take over the building, land plots and other assets of Makro Indonesia that there would be no problem with its customers, suppliers and workers.

HSBC ACQUIRES BANK EKONOMI. The Hong Kong and Shanghai Banking Corporation . Ltd (HSBC) through HSBC Asia Pacific Holdings (UK) Limited has acquired 88.89% of PT Bank Ekonomi Raharja . HSBC will pay US$607.5 million for the stake with internal cash, chief executive of HSBC Asia Pacific Sandy Flockhart said. The acquisition of Bank Ekonomi will strengthen retail banking business of HSBC in Indonesia with 190 branches in 24 cities the country, Flockhart said in a statement. Bank Ekonomi, which is listed on the Indonesian Stock Exchange , had assets valued at Rp17.193 trillion (US$1.8 billion) in September with pre tax profit of Rp231 billion in the first nine months of this year . Flockhart said the acquisition of Bank Ekonomi is part of HSBC's strategy to strengthen its position among three largest foreign banks in Indonesia. The bank has operated for 125 years in Indonesia.

PERTAMINA GE TO BUILD GEOTHERMAL POWER PLANTS. PT Pertamina Geothermal Energy , a subsidiary of state oil and gas company PT Pertamina, said it plans to build six geothermal power plants with a total capacity of 680 megawatts this year. The six power plants , expected to be operational in 2014, will cost around US$200 million , company President Abadi Pronomo said. The World Bank, Asian Development Bank and Japan Bank for International Cooperation (JBIC) , have indicated interest in financing the project, Abadi said. Pertamina already has a number of geothermal power plants with a total capacity of 272 MW including Kamojang in West Java , Lahendong and Sibayak in North Sumatra Meanwhile, Pertamina said it is set to go ahead with its plan to invest up to US$4.7 billion in three years starting in 2009. Global financial crisis would not change Pertamina's investment plan to increase oil production to 125,000 barrels per day starting next year, Pertamina President Ari H. Soemarno said.

BCA AGREES TO ACQUIRE BANK UIB. PT Bank Central Asia (BCA) agreed to acquire the whole shares of PT Bank UIB at an estimated price of Rp242 billion (US$25.4 million). The process of acquisition is expected to be completed early next year, head of marketing communications of BCA Dendi T Daninato said. Dendi said sale and purchase agreement was signed with the owners of Bank UIB on Oct. 24. He said UIB will be converted into a sharia bank in a year after the process of acquisition is completed. The acquisition is an early step by BCA to expand market and to take part in banking consolidation in the country , he said. . He said the shareholders have yet to sanction the acquisition in a general meeting to be held early next year. BCA, the country's largest private bank, reported Rp105 trillion in outstanding credits in September, exceeding its target of Rp100 trillion set by the end of this year. BCA has good liquidity with Rp26.8 trillion invested in Bank Indonesia promissory notes (SBI). Bank UIB has five branches and seven units of cash office in the country.