First payment on 30% stake for BCA due next week<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
American investment firm Farallon Capital Management agreed to
\npay for the first 30 percent of a stake in Bank Central Asia
\n(BCA) by March 28, the Indonesian Bank Restructuring Agency
\n(IBRA) said on Monday.<\/p>\n
The transaction will add to IBRA's coffers Rp 3.1 trillion
\n(about US$311 million) of the Rp 42 trillion it must raise this
\nyear to help cover a state budget deficit of roughly the same
\namount.<\/p>\n
IBRA chairman I Putu Gede Ary Suta said the remaining 21
\npercent in BCA would be transferred within the next six months.<\/p>\n
\"The SPA (sales and purchase agreement) has already been
\nsigned ... they (Farallon) will pay by March 28,\" he told
\nreporters.<\/p>\n
Last week the government selected Farallon as the winning
\nbidder for a 51 percent stake in BCA, ending nearly two years of
\neffort to sell the bank.<\/p>\n
Under the deal, BCA's shares will be sold in two stages, of
\nwhich 30 percent will go in the first stage, and the remainder in
\nthe second, through an option that will expire over a six-month
\nperiod.<\/p>\n
Farallon agreed to pay Rp 1.775 per share, amounting to about
\nRp 5.3 trillion for the entire 51 percent stake.<\/p>\n
While the cash inflow will lift some pressure from the state
\nbudget, it will also give the rupiah another boost against the
\nU.S. dollar.<\/p>\n
The local unit has kept its strength over the past three
\nmonths on what analysts said was a relatively stable political
\noutlook, and investor confidence-building deals like BCA.<\/p>\n
News of fresh dollar supply by late next week, might also
\ndeter dollar hunters from trading their rupiah too early.<\/p>\n
But Ary Suta did not say whether Farallon would pay IBRA in
\nrupiah, which would require it to first exchange its dollars
\nbefore the March 28 deadline.<\/p>\n
On the planned sale of Bank Niaga, he said 14 investors had
\nexpressed interest to purchase a 51 percent stake in the bank.<\/p>\n
\"There are both local and foreign ones,\" Ary Suta said of the
\ninvestors, without elaborating.<\/p>\n
IBRA recently sent bidding invitations to potential investors,
\nincluding the 14 that Ary Suta referred to above.<\/p>\n
Bank Niaga is the second bank to go on sale after BCA under a
\ndivestment plan that will help mitigate the government's losses
\nin one of the world's most costly banking bailouts.<\/p>\n
Some Rp 630 trillion was spent to prevent a collapse of the
\ncountry's banking system after the 1997 financial crisis.<\/p>\n
The government also spends around Rp 60 trillion a year to
\nkeep banks afloat through its recapitalization program.<\/p>\n
IBRA was founded partly to recoup the bailout cost, but its
\npoor recovery rate so far has led some government officials to
\nlower their expectations regarding reduction in the bailout cost.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/first-payment-on-30-stake-for-bca-due-next-week-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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