BCA workers to strike if sale plan proceeds<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Some 80 percent of Bank Central Asia (BCA) employees will stage a
\nmassive strike if the government goes ahead with its plan to sell
\na majority stake in the bank to a new strategic investor,
\naccording to an official of the BCA labor union.<\/p>\n
\"We are committed to staging a massive strike. About 80
\npercent of the total 21,000 employees will stop work during the
\nstrike,\" union spokesman Bilal Idries told reporters following
\nthe union's meeting with State Minister for National Development
\nPlanning Kwik Kian Gie on Wednesday.<\/p>\n
The union has been staging protests against the sale plan over
\nthe past couple of weeks amid fears that a change of ownership
\nwould lead to massive layoffs. There has also been xenophobic
\nsentiment against the taking over of the country's largest retail
\nbank by foreigners.<\/p>\n
The government is now in the process of finalizing the sale,
\nwhich is expected to be completed sometime next week. Four
\nbidders are vying for the government's 51 percent stake in BCA.
\nTwo of the bidders are foreign-led consortia, including the
\nStandard Chartered Bank consortium and the Farallon Capital-led
\nconsortium. The latter is a giant U.S. investment firm.<\/p>\n
Both the foreign bidders earlier said that they would not lay
\noff staff if they succeeded in acquiring a stake in the bank.<\/p>\n
The government nationalized BCA in 1998 after it suffered
\nmassive runs at a time when confidence in the industry was at its
\nlowest ebb.<\/p>\n
The sale of the BCA stake is seen as being crucial not only
\nfor raising cash to help cover the state budget deficit, but also
\nfor helping revive investor confidence, including that of
\nmultinational donors. Previous attempts to sell the bank had been
\nblock by politicians and legislators.<\/p>\n
Meanwhile, Kwik questioned the planned sale of BCA, because
\nthe bank was heavily reliant on government bond interest for its
\nrevenue.<\/p>\n
BCA owns some Rp 58 trillion worth of recapitalization bonds
\nfrom which it earns interest of some Rp 7 trillion a year.<\/p>\n
That compares to the Rp 5 trillion or Rp 6 trillion the
\ngovernment hopes to net from the sale of the 51 percent stake in
\nthe bank.<\/p>\n
According to Kwik, the government should have rid BCA of the
\nbonds before returning the bank to private hands.<\/p>\n
For its part, BCA is better off having the government bonds
\nreplaced with loans as they carry higher interest rates than the
\ncoupon rates.<\/p>\n
State Minister for State Enterprises Laksamana Sukardi said
\nearlier that a number of BCA bidders wanted the bank to replace
\nthe bonds.<\/p>\n
Responding to this, the Indonesian Bank Restructuring Agency
\n(IBRA) is now mulling over redeeming the bonds with loan assets
\nthat it took over from sick banks during the financial crisis in
\nthe late 90s.<\/p>\n
Kwik called the plan unrealistic, \"if we give BCA the loans,
\nwhich IBRA is supposed to sell, with what are we going to cover
\nour state budget deficit?\" he said.<\/p>\n
IBRA is slated to raise some Rp 42 trillion from asset sales
\nto help plug the hole in the 2002 budget.<\/p>\n
According to Kwik, this plan is no different than spending
\ncash to redeem BCA's Rp 58 trillion worth of government bonds.<\/p>\n
The sale of the BCA shares is also part of the reform targets
\nset out under a lending agreement with the International Monetary
\nFund (IMF).<\/p>\n
A delay in the sale of BCA shares in late 2000 prompted the
\nIMF to protest, which contributed to an eight-month suspension of
\nits loan program. As yet there have been no complaints from the
\nIMF this time around.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bca-workers-to-strike-if-sale-plan-proceeds-1447893297",
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"sponsor": "Okusi Associates",
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