Central bank to seek deadline for BCA sale
Central bank to seek deadline for BCA sale
Berni K. Moestafa, The Jakarta Post, Jakarta
As confusion still reigns over the timing of Bank Central Asia
(BCA) sale, Bank Indonesia said it would seek a deadline from the
government if uncertainty lingered up to Friday next week.
Bank Indonesia Governor Sjahril Sabirin said the Indonesian
Bank Restructuring Agency (IBRA) had one week as of Friday to
submit documents for bidders to pass its fit-and-proper test.
Only after the documents had been collected, he said, could
Bank Indonesia proceed with examining final bidders for the BCA
shares.
The tests on them might take up to 30 days, but would likely
be less, he added.
Asked what he would do after the one week had passed, he said:
"We're going to discuss that with IBRA (and) when it expects to
complete (the BCA sale)."
He refused to say how many bidders had yet to complete their
documents, and what types of documents they were.
Sources close to the sale process said that all four final
bidders submitted incomplete documents.
Among the bidders are two foreign led consortia -- one led by
U.S. investment firm Farralon Capital and the other by the
British-based Standard Chartered Bank Plc.
After nearly two years, BCA's sale process has entered the
last stage with the submission of the final bids last Monday.
But even at this stage, it remains unclear when IBRA plans to
close the deal for a 51 percent stake in BCA.
IBRA argued it was waiting for Bank Indonesia to complete its
fit-and-proper test, but Sjahril pointed out that it was IBRA's
call.
"The one selling the shares is IBRA. Bank Indonesia is only
helping to examine the bidders' shareholders," he said.
For its fit-and-proper tests, Bank Indonesia has 17
requirements, five of which are mandatory to win the bid.
Among the five key documents is one that identifies the
"ultimate shareholders" of the final bidders for BCA.
The central bank bars local banks from funding the
acquisition, including people on its blacklist for bank owners.
BCA's former owner, the Salim Group, misused some Rp 52
trillion (about US$5 billion) in state funded bailout loans in
the wake of the 1997 financial crisis. Salim has since been
blacklisted from BCA.
But the unclear timing of the sale and suspicion that Salim
may be hiding among the bidders have done little to hurt the
credibility of the sale process.
Foreign investors were said to be closely watching the sale
process of BCA, deemed as one of IBRA's best assets.
The sale of the BCA shares is also part of reform targets set
out under a lending agreement with the International Monetary
Fund (IMF).
A delay in the sale of BCA shares in late 2000 prompted the
IMF to protest, which contributed to an eight-month suspension of
its loan program. As yet there have been no complaints from the
IMF this time around.