Four bidders join final race for BCA

Four bidders join final race for BCA

Berni K. Moestafa, The Jakarta Post, Jakarta

Four bidders out of the original nine remain in the race for Bank
Central Asia (BCA) as the deadline for submitting the final bids
passed on Monday, although no date has yet been set for naming
the winner.

Among the four are British-based Standard Chartered Plc, and
the U.S. investment firm Farallon Capital, a statement by the
Indonesian Bank Restructuring Agency (IBRA) said late on Monday.

Out of the race are the Trimegah Consortium, Indonesian
Recovery Fund Limited (IRCL), Malaysian Plantation Group,
Thailand's Dynamic Choice, and the Berca Consortium.

The final four bidders have also undergone composition changes
with PT Berca Indonesia joining Standard Chartered along with the
Singapore Investment Corp Pte and Prudential Plc.

U.S. investment firm Newbridge Capital is no longer listed as
a member of the GKBI consortium, which is still in the race,
according to the statement.

IBRA chairman I Putu Gede Ary Suta said the agency would
announce the winner after Bank Indonesia completed its fit and
proper tests on some of the bidders. He did not, however, know
when this would be.

The last hurdle for the final bidders will consist of two
evaluation stages, Ary Suta said.

In what he called the drop dead test, the first stage would
filter out investors even before looking at their final bids.

Here, the bidders must, among other things, produce a warrant
stating that they have no links with the Salim Group, while also
passing Bank Indonesia's fit and proper test.

The remaining bidders will then proceed to the second stage,
where their offer prices may win them half the battle.

At this stage, the choice of the winning bidder will be 50
percent decided by the bidders' offer prices, 25 percent by the
terms and conditions they are seeking, and 20 percent by the
membership structure of the consortium (if any) and the quality
of its lead.

Bidders must also outline their business plans for BCA, with
this being worth five percent of the criteria weighting.

Ary Suta said the price offers in the final bids covered the
whole 51 percent stake in BCA, although 21 percent of the shares
would be sold later under an option.

"It'll be a put option for the government, and call option for
the investor," explained Soebowo Musa, deputy chairman of IBRA's
Bank Restructuring Unit (BRU).

Under the put option, the investor must buy the 21 percent
stake in BCA if the government offers it, while the call option
requires the government to sell the stake if the investor asks
for it.

Monday's closing of the final bids marked a milestone in
ending the long and intricate process of returning BCA to the
private sector.

Attempts to sell BCA to a strategic investor floundered due to
too much politicking, and interference from legislators.

In the end, selling BCA became a litmus test for the
government in pushing ahead with strategic asset sales, with its
credibility being on the line in the eyes of the investment
community.

BCA final bidders

1. The Farallon Capital Consortium. Lead: Farindo Holdings
Ltd. (Mauritius). Members: Alaerka Investment Ltd, owned by
shareholders of cigarette producers PT Djarum

2. Bank Mega Consortium

3. GKBI Consortium. Members: PT Jamsostek, GKBI Investment,
PT Saratoga Investment Sedaya and PT Rifan Financindo Asset
Management

4. Standard Chartered Consortium. Members: Government of
Singapore Investment Group Pte, Ltd., Prudential Plc and PT
Berca Indonesia. --Source: IBRA