Govt to declare winning bidder of BCA stake in days
Moch. N. Kurniawan, The Jakarta Post, Jakarta
The government has already picked the winning bidder for a controlling stake in Bank Central Asia (BCA), the country's largest retail bank, and will announce it within a couple of days, according to State Minister of State Enterprises Laksamana Sukardi.
"We have already decided on the winner but it's unethical if we disclose it now as we have to complete some administrative matters first and keep our credibility in the bidding process.
"We will announce the winner this week, it could be tomorrow or the day after tomorrow," he told reporters on Wednesday prior to a hearing session with the House of Representatives Commission IV overseeing infrastructure and transportation affairs.
The sale of the government's 51 percent stake in BCA is seen as a key factor to maintain international support to the crisis- hit country. The completion of the divestment program will be proof of the government's commitment to the economic reform program.
The sale process had been hit by snags right up until the last moment when thousands of the bank's employees, fearing massive layoffs under a new owner, took to the streets on Monday to oppose the plan. This has raised fears that the government might delay the sale plan again.
The government previously shortlisted two final bidders for the BCA stake, namely U.K.-based Standard Chartered Bank Plc. (StanChart), and U.S. investment firm Farallon Capital.
StanChart seems to be the favorite to win the race.
StanChart quickly responded to the concern of the protesting BCA employees, saying on Tuesday that there would be no massive job cuts and no changes to employee benefits if it became the new owner of the bank. Farallon was not available for comment, although it had said previously that there would be no layoffs within the first two years.
The sale of the BCA stake is expected to provide the cash- strapped government with some Rp 5 trillion (US$500 million) in cash to help finance the 2002 state budget deficit.
Founded by the Salim Group, once the country's largest conglomerate, BCA was nationalized by the government in the wake of the 1997 financial crisis. The government injected nearly Rp 60 trillion worth of bonds to boost the ailing bank's capital adequacy ratio to more than 4 percent, enough for it to stay afloat.
The state budget had to cover the interest rate of the bonds, amounting to around Rp 7 trillion per year.
State Minister for National Development Planning Kwik Kian Gie had insisted the government delay the sale until it could unload the recapitalization bonds from BCA.
He argued that it would not make sense for the cash-strapped government to continue paying around Rp 7 trillion per year in taxpayer's money to a new foreign owner of the bank.