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