BCA re-tender to start next week<\/p>\n
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
\nexpects to start the retender process for a 51 percent stake in
\nBank Central Asia (BCA) by early next week, according to a senior
\nofficial at the agency.<\/p>\n
IBRA deputy chairwoman for bank restructuring Felia Salim said
\non Wednesday that by next week IBRA would start sending out
\nbidding invitations.<\/p>\n
\"Preparations are under way. Hopefully late this week, but
\nmost likely early next week we'll send out the bidding
\ninvitations,\" Felia told reporters following a hearing between
\nIBRA and House of Representatives Commission IX for financial
\naffairs.<\/p>\n
She said the second tender would follow the same process as
\nthe one last March, when IBRA sent offerings to 55 investors.<\/p>\n
The \"teaser letters\", Felia said, would be sent to banks and
\nfinancial institutions.<\/p>\n
\"Based on the House's decision, they (the potential investors)
\nmust be banks and financial institutions with a good reputation.\"<\/p>\n
\"The criteria is clear ... they must have a good reputation
\nand should be capable of increasing BCA's value,\" she explained.<\/p>\n
Earlier, IBRA chairman I Putu Gede Ary Suta said he would sell
\nthe 51 percent BCA stake at a premium price of Rp 1,750 a share.
\nBCA shares are currently trading at 1,325 a share.<\/p>\n
Once the largest private bank, BCA is considered to be one of
\nthe gems among the assets IBRA controls.<\/p>\n
Thus far, the agency has divested 32.5 percent through the
\nstock market, with two public offerings in May 2000 and last
\nJuly.<\/p>\n
Yet efforts to divest BCA stakes through private placement
\nhave been without success.<\/p>\n
IBRA's first attempt last year to sell off BCA to a strategic
\npartner ran aground due to then unfavorable market conditions.<\/p>\n
Legislators blocked the move over concern that a sluggish
\nmarket would undermine BCA's value and lead to a fire sale of the
\nbank.<\/p>\n
IBRA's second attempt last March, analysts said, failed to
\ngenerate enough interest due to an unattractive sale strategy.<\/p>\n
Legislators had demanded that BCA remain under Indonesian
\ncontrol, allowing only a 30 percent stake to be sold to foreign
\ninvestors.<\/p>\n
That strategy, however, made BCA unattractive to investors
\nseeking a controlling stake in the bank, according to analysts.<\/p>\n
IBRA delayed the tender process, and an IBRA official later
\nconfirmed that only two final bidders had remained. Speculation
\nrose that their bids had been too low.<\/p>\n
State Minister of Enterprises Laksamana Sukardi then decided
\nto relaunch the sale of it stake in BCA, this time with a 51
\npercent offering.<\/p>\n
Felia said it would take more than one month for IBRA to
\nshort-list the bidders before announcing their names.<\/p>\n
She did not say when IBRA expected to announce the bidders,
\nbut the agency is required to wrap up BCA's sale this year.<\/p>\n
Privatizing BCA is part of the reform targets contained in the
\ngovernment's letter of intent (LoI) to the International Monetary
\nFund.(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bca-re-tender-to-start-next-week-1447893297",
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"sponsor": "Okusi Associates",
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