First payment on 30% stake for BCA due next week
First payment on 30% stake for BCA due next week
The Jakarta Post, Jakarta
American investment firm Farallon Capital Management agreed to
pay for the first 30 percent of a stake in Bank Central Asia
(BCA) by March 28, the Indonesian Bank Restructuring Agency
(IBRA) said on Monday.
The transaction will add to IBRA's coffers Rp 3.1 trillion
(about US$311 million) of the Rp 42 trillion it must raise this
year to help cover a state budget deficit of roughly the same
amount.
IBRA chairman I Putu Gede Ary Suta said the remaining 21
percent in BCA would be transferred within the next six months.
"The SPA (sales and purchase agreement) has already been
signed ... they (Farallon) will pay by March 28," he told
reporters.
Last week the government selected Farallon as the winning
bidder for a 51 percent stake in BCA, ending nearly two years of
effort to sell the bank.
Under the deal, BCA's shares will be sold in two stages, of
which 30 percent will go in the first stage, and the remainder in
the second, through an option that will expire over a six-month
period.
Farallon agreed to pay Rp 1.775 per share, amounting to about
Rp 5.3 trillion for the entire 51 percent stake.
While the cash inflow will lift some pressure from the state
budget, it will also give the rupiah another boost against the
U.S. dollar.
The local unit has kept its strength over the past three
months on what analysts said was a relatively stable political
outlook, and investor confidence-building deals like BCA.
News of fresh dollar supply by late next week, might also
deter dollar hunters from trading their rupiah too early.
But Ary Suta did not say whether Farallon would pay IBRA in
rupiah, which would require it to first exchange its dollars
before the March 28 deadline.
On the planned sale of Bank Niaga, he said 14 investors had
expressed interest to purchase a 51 percent stake in the bank.
"There are both local and foreign ones," Ary Suta said of the
investors, without elaborating.
IBRA recently sent bidding invitations to potential investors,
including the 14 that Ary Suta referred to above.
Bank Niaga is the second bank to go on sale after BCA under a
divestment plan that will help mitigate the government's losses
in one of the world's most costly banking bailouts.
Some Rp 630 trillion was spent to prevent a collapse of the
country's banking system after the 1997 financial crisis.
The government also spends around Rp 60 trillion a year to
keep banks afloat through its recapitalization program.
IBRA was founded partly to recoup the bailout cost, but its
poor recovery rate so far has led some government officials to
lower their expectations regarding reduction in the bailout cost.