BCA divestment plan on schedule: IBRA<\/p>\n
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
\ndismissed speculation of a delay in the divestment of its
\nownership in the giant, publicly listed PT Bank Central Asia
\n(BCA), saying the divestment process was proceeding according to
\nschedule.<\/p>\n
IBRA deputy chairwoman Felia Salim said, however, on Friday
\nthat the evaluation of the submitted bid would take longer, as
\nthe agency wanted to ensure a profitable sale.<\/p>\n
\"IBRA decided to take more time for the evaluation of all
\nsubmitted bids and to negotiate the terms and conditions to be
\nimposed on the selected investor,\" Felia said in a statement.<\/p>\n
BCA's divestment is slated for late June or early July, with
\nIBRA supposed to announce the bidders by the end of this week.<\/p>\n
The government plans to divest 40 percent of its stake in BCA,
\nwith up to 30 percent being sold through private placement, and
\nthe rest through a secondary public offering.<\/p>\n
IBRA said previously that around 10 local and institutional
\ninvestors had submitted bids for BCA, but later this number
\nshrank to five.<\/p>\n
Yet, speculation has arise that BCA's sale may be delayed
\nbecause the government deemed the bids which have been submitted
\nso far as being too low.<\/p>\n
Finance minister Rizal Ramli has said he wanted IBRA to ensure
\nthat the divestment of BCA would not end in a fire sale.<\/p>\n
BCA, which was once the country's largest private bank, is
\namong the gems of IBRA's assets.<\/p>\n
BCA's extensive network of branches and banking infrastructure
\nhas carved out for it a strong position in the retail banking
\nmarket.<\/p>\n
The government nationalized IBRA following the devastating
\n1997 regional financial crisis.<\/p>\n
The government now expects investors to pay a premium price
\nfor BCA's shares. But analysts said investors would agree to pay
\na higher price only if the government granted them a majority
\nstake in the bank.<\/p>\n
Felia said IBRA was as yet unable to disclose further details
\nas negotiations over the submitted bids were still underway.<\/p>\n
Because of the bank's strategic value, IBRA had decided to
\nextend the time limit for evaluating the bids, she continued.<\/p>\n
This consideration, however, could lead the government to
\ndelay BCA's divestment for a second time.<\/p>\n
BCA, along with Bank Niaga, was slated for divestment last
\nyear. Back then, legislators blocked the sales on fear that they
\nwere untimely given the sluggish market conditions then
\nprevailing.<\/p>\n
The move prompted the International Monetary Fund (IMF) to
\nwithhold the disbursement of a US$400 million loan tranche to
\nIndonesia.<\/p>\n
The two banks' divestment forms part of the economic reform
\ntargets the government must meet in order to obtain further
\nfinancial aid from the IMF.<\/p>\n
Five billion U.S. dollars have been allocated to Indonesia
\nunder the IMF's three-year economic recovery program. But since
\nlast year's delay of the loan tranche, the IMF has yet to resume
\nits financial assistance to the country.<\/p>\n
Risking a second delay in the BCA divestiture could lead to a
\nfurther deterioration in Indonesia's relations with the IMF.<\/p>\n
According to legislator Theo Toemion, the IMF has demanded
\nthat the government sell 39 percent of BCA's stake under private
\nplacement, with only 1 percent to be offered to the public.<\/p>\n
BCA held its initial public offering last year, at a price of
\nRp 1,400 (about 12 U.S. cents) per share. But persistent selling
\npressure in the stock market has dragged its share price down to
\nRp 1,000. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bca-divestment-plan-on-schedule-ibra-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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