JAKARTA - Toyota Motor Corp. has strengthened its foothold in the Indonesian car sector after shareholders of PT Astra International agreed on Thursday to sell a key stake in its manufacturing and distribution unit to the top Japanese automaker.
"The shareholders have given their approval to sell 46 percent of Toyota Astra to Toyota Motor Corp. for $226 million," Indonesia's leading car maker, Astra International, said in a statement.
Before the sale, Toyota owned 49 percent in the joint-venture Toyota Astra Motor.
Following the deal, a new company will be set up to take over the sale and distribution of Toyota vehicles in Indonesia from Toyota Astra Motor.
Astra International will have a 51 percent stake in the new firm that has yet to be named, while Toyota Motor will own the remainder.
Toyota Astra Motor will focus on assembling Toyota cars in Indonesia for the Japanese firm, which will control the manufacturing arm with a 95 percent stake. Astra International will hold the rest.
Toyota has said it planned to invest about $180 million in Indonesia after taking control of the manufacturing unit in the country.
John Slack, a director for Astra International, said 75 percent of the $226 million, after deducting taxes, would be used to pay Astra's debts that were estimated at $755 million, excluding loans at the subsidiaries.
The deal will allow Astra International to be more focused on its distribution and marketing businesses.
Slack also said Astra would not distribute cash dividend this year.
In 2002, more than 80,000 Toyota commercial and passenger cars were sold in Indonesia.
Singapore's Cycle and Carriage, one of Southeast Asia's largest car dealers, holds 35.05 percent of Astra International.