10 major investors bid for BCA shares

10 major investors bid for BCA shares

JAKARTA (JP): More than 10 local and foreign institutional
investors have submitted bids for Bank Central Asia (BCA) shares,
a senior official of the Indonesian Bank Restructuring Agency
(IBRA) said here on Tuesday.

IBRA's deputy chairwoman, Felia Salim, said the agency planned
to sell between 20 percent and 30 percent of BCA shares to a
strategic investor.

"We plan to sell around 20 percent to 30 percent through
private placement," she said when asked whether the agency had
changed its selling strategy.

Felia said that the agency would abide with the House's
stipulation that the government sell the 40 percent of BCA
through a combination of a strategic sale and secondary offering.

Speaking to reporters on the sidelines of a hearing with House
Commission IX on the state budget and finance, she said the non-
binding tender process, which started last week, would be closed
at the end of this month.

"We expect to complete the divestment program by the end of
June or early July," she added.

BCA plans to launch its secondary public offering as part of
the government's divestment program in the bank early July.

Asked if the agency would consider selling more than 30
percent of BCA's shares via direct placement, she said: "We can't
decide yet because we're still studying the appetite of the
investors."

Felia refused to explain the details.

Selling the government's 40 percent stake in BCA through a
private placement will provide the government with a premium
price, but analysts have said that a strategic investor would
only agree to pay the premium if they could obtain a large block
of shares.

But legislators have said that selling the shares via a
private placement mechanism would lack transparency. There has
been strong pressure from legislators to bar the former BCA
owner, the Salim Group, from buying back into the bank.

Separately, legislator Theo Toemion of the House of
Representatives' Commission IX, said that the International
Monetary Fund (IMF) had demanded the government sell 39 percent
of its stake in BCA to strategic investors.

The IMF's Asia Pacific deputy director Anoop Singh had
demanded that 39 percent of the 40 percent stake which the
government planned to divest from BCA be sold to strategic
investors and the other 1 percent to the public.

Theo said he met Singh late last month when he was leading a
visiting IMF team to review progress in Indonesia's economic
reform program.

"It seems there is the worry that a secondary public offering
will not be successful," Theo said after attending an investment
seminar organized by Bank Commonwealth (the Indonesian operation
of Australia's Commonwealth Bank).

The proceeds from the selling of BCA shares on the stock
market, he said, might not reflect the bank's real value given
the present unfavorable market conditions. However, Theo said he
preferred a secondary offering as it would ensure the bank
remained under Indonesian control.

BCA's divestment, along with that of Bank Niaga, was slated
for last year. Legislators blocked the sales on fears that they
were untimely given the then sluggish market.

The move, however, prompted the IMF to later delay
indefinitely the disbursement of the next tranche of a US$400
million loan to the country. The IMF has promised Indonesia a $5
billion loan package under a three-year economic reform package.
(rei/bkm)