IBRA prepares for BCA retender, official says<\/p>\n
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
\nis preparing the "relaunch" of a tender process for a 30 percent
\ngovernment stake in Bank Central Asia (BCA), after it seemingly
\nfailed to obtain a good bid in the first round, according to IBRA
\nchairman I Putu Gede Ary Suta.<\/p>\n
Ary Suta said Monday that plans to relaunch the tender
\nfollowed the decision made by State Minister of State Enterprises
\nLaksamana Sukardi, who now supervises IBRA.<\/p>\n
"The Minister has reached a decision about BCA; now we'll just
\nhave to carry it out, and prepare all we need for the
\nrelaunching," he told reporters prior to a meeting with a
\nvisiting team from the International Monetary Fund (IMF).<\/p>\n
He said IBRA would open the tender for new comers and current
\nbidders, providing they met all requirements.<\/p>\n
"I think it's only fair to give everyone a chance to
\nparticipate," he said.<\/p>\n
Asked whether the government would alter the composition of
\nBCA shares it would offer, he said that it was unlikely, though
\npossible.<\/p>\n
"It depends, the minister (Laksamana) will have to report this
\n(relaunching) to legislators," Ary Suta said.<\/p>\n
In March, legislators approved the sale of a 40 percent stake
\nin BCA. By July, the government had sold the first 10 percent
\nthrough a secondary public offering.<\/p>\n
The tender process for the other 30 percent stake, however,
\nhas mostly been shrouded in secrecy by IBRA. It remains unclear
\nhow far the tender process has progressed since it was launched
\nearlier this year.<\/p>\n
In May, IBRA said that more than 10 local and foreign
\ninvestors had submitted their bids for BCA stakes.<\/p>\n
Sources close to the process, however, said only two bidders
\nthus far remained.<\/p>\n
IBRA declined to reveal their identities, but unconfirmed
\nreports named investment firms Indonesia Recovery Company Limited
\n(IRCL) and Newbridge Capital from America.<\/p>\n
IRCL is a joint venture between local firm Bhakti Capital
\nInvestama, and Hong Kong's Asia Debt Management.<\/p>\n
Many believe Bhakti to be a proxy for BCA's former owner, the
\nSalim Group, which is trying to claw its way back into the bank.<\/p>\n
Newbridge had earlier tried to acquire IBRA's stakes in PT
\nAstra International, and Salim's giant palm plantation units. In
\nboth attempts, the U.S. investment firm failed.<\/p>\n
The divestment of BCA is part of the economic reform targets
\nset out under a lending agreement with the IMF.<\/p>\n
Under a draft of this agreement, known as the Letter of Intent
\n(LoI), IBRA must finalize the sale by September.<\/p>\n
The agency was supposed to complete the sale last year, but
\nlegislators blocked the move over concerns that the then
\nunfavorable market conditions would drive BCA's share price down.<\/p>\n
The BCA issue, and other reform targets missed last year
\nprompted the IMF to suspend a US$400 million loan tranche from
\nDecember.<\/p>\n
Now, delays continue to plague BCA sales. IBRA should have
\nannounced the final bidders by late June, but canceled the
\nannouncement, saying it wanted to pursue a better deal.<\/p>\n
BCA was once the country's largest private bank before the
\ngovernment nationalized it over failure to repay debts it owed to
\nBank Indonesia.<\/p>\n
Strong in the retail market, BCA is seen as among the few
\nassets under IBRA capable of attracting high-paying bidders.<\/p>\n
However, IBRA's indecision over the sales, and a looming IMF
\ndeadline, are likely to weaken the agency's bargaining position
\nfor the highest possible price from the bidders.<\/p>\n
IBRA itself is depending on successful BCA sales, hoping it
\ncan catch up on its revenue target for this year.<\/p>\n
Under the 2001 state budget, IBRA's contribution should stand
\nat Rp 27 trillion (about $3.15 billion) by the end of this year.<\/p>\n
But throughout the first semester, it managed to secure less
\nthan half of its target, or just Rp 11.2 trillion.(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ibra-prepares-for-bca-retender-official-says-1447893297",
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