INVESTOR UPDATE OCTOBER 1998

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PT Astra International Tbk hosted a meeting in Singapore with its lenders last October 22.

Representatives of Astra included its top management: Rini M.S. Soewandi, President Director, Dorys Herlambang, Chief Corporate Finance, and Endang Indriati, General Manager and supported by its financial advisers: Chase Manhattan (S.E.A.) Limited, Sakura Merchant Bank (Singapore) Limited, The Sumitomo Bank Ltd., its legal advisers: Freshfields, Lubis Ganie Surowidjojo and its independent party to review financial statement projections: The Center for Investment and Business Advisory, who has a strategic alliance with Arthur Andersen.

During the meeting, Astra announced that its businesses have been adversely affected by the macro economic downturn in the Indonesian and Asian economies, as a whole. As an example, it was noted that Astra's Automotive Division, which is the premier manufacturer, distributor and financier of automobiles in Indonesia, reflected the magnitude of this downturn with current sales showing a 90% decline against 1997 results.

While Astra recognizes that the next few years are going to be very difficult, it remains confident of the future of the Indonesian economy and the Company. In order to ensure this future, Astra had taken several initiatives including:

1) Sale of Astra Microtronics Technology .
2) Sale and dilution of 25% portion of Astra Daihatsu Motors.
3) Retrenchment of 25,000 from its 120,000 employees.
4) Debt restructuring program.

Astra debt restructuring process, which involves Financial Advisers, will be categorized into two frameworks:

Standardized Restructuring Framework, will limit creditors・concerns about cash controls and maximize repayment while allowing time for the companies utilizing this structure to recover. Listed companies included in this category are:

PT Astra Graphia Tbk
PT Astra Otoparts Tbk
PT Sumalindo Lestari Jaya Tbk
PT United Tractors Tbk

The focus of this meeting was to explain and present the materials or data concerning the proposal of Standardized Restructuring Framework.

Individual Restructuring, for companies with high complexity situation or in relative strong financial health are needed to be treated on individual basis. The listed company included in this category is:

PT Astra International Tbk
Restructurings will be implemented by Creditors・Committees. These committees will be comprised of Astra's key relationship banks and will assist the Company and its advisers in quickly achieving a common agreement on a comprehensive debt restructuring plan.

Besides the above mentioned restructuring programs, several companies under Astra Group, bearing strong principal support or those dealing with Indonesian lenders only, are going to negotiate their debt restructuring directly with their respective creditors without the assistance/involvement of financial advisers.

Astra also announced that as a result of the macro economic downturn in Indonesia and significant decrease of domestic market, interest under the current terms of its facilities will be temporarily deferred by some of its companies until restructuring plan is approved by the creditors.

In Astra's management view, though the current ills besetting Indonesia severe they are solvable with time. As the world's fourth most populous country and as a provider of many world's strategic commodities, Indonesia's and Astra's ability to rebound is clear. In addition, Astra believes that the strides made over three decades in Indonesia in term of expanding the country's manufacturing base will actually benefit in the long run from the recent turmoil in that it has ensured Indonesia will remain a low cost provider of value-added products relative to its competitors. The management of Astra remains confident in regards to the Company's future and requests that its lenders maintain their relationship with the company and thus, participate in its expected recovery from current situation.

For further information, please contact Lukas Iwan/Cecilia O. Sumarlin at Investor Relations, Wisma 46 - KOTA BNI, Lt. 8 Jl. Jend. Sudirman Kav. 1, Jakarta 10220 Phone: (62-215711555 Ext. 145, 143/ Fax: (62-21)5714232, 5714233