Govt's sells remaining stake in BCA

Govt's sells remaining stake in BCA

Urip Hudiono, The Jakarta Post, Jakarta

The government sold on Wednesday its remaining 5.02 percent stake
in Bank Central Asia (BCA), the country's second largest lender
by assets, reaping Rp 2.19 trillion (US$219 million) in proceeds
for the state coffers.

Head of the state-owned Asset Management Company (PPA),
Mohammad Syahrial, said the stake was sold for Rp 3,550 a share,
or a 2 percent premium on the shares' closing price on Tuesday.

Trading of BCA's shares at the Jakarta Stock Exchange were
suspended on Tuesday for the sale, with their prices ending
steady at Rp 3,475.

Investment firms Bahana Securities and Deutsche Bank AG had
helped manage the sale.

"With the sale, the government no longer has any shares at
BCA," Syarial said. "Proceeds from the sale will be submitted to
the government as revenue for the 2005 state budget."

PPA deputy head Raden Pardede said that PPA had received bids
for the 618,236,200 shares on offer from a total of 11 overseas
and local investors, oversubscribing the shares 1.24 times.

"Almost all -- 99.7 percent -- of the investors who finally
bought the shares were foreign investors," Raden said, without
specifying who they were as they were still being listed pending
the settlement of the sale.

San Francisco-based hedge fund firm, Farallon Capital
Management LLC, currently controls BCA, with a stake of 52
percent.

Farralon had bought a 30 percent stake in BCA for Rp 5.37
trillion during the government's initial offering in March 2002,
before again raising its stake to 52 percent in February last
year, when the government again sold a 1.48 percent stake at the
bank.

The government managed to raise Rp 1.55 trillion at the time,
along with its sale of a 7.85 percent stake in Bank Danamon, 5.65
percent in Bank Niaga and 1.99 percent in Bank Internasional
Indonesia (BII).

The government had injected Rp 52.7 trillion into BCA in an
attempt to bail it out following the 1997 Asian financial crisis,
effectively taking control of the bank from its previous owner
the Salim Group.

Wednesday's BCA sale was the government's second attempt this
year, after bids from investors during the first on March 23
failed to meet the government's expectations.

The cash-strapped government is selling its remaining stakes
in banks and other firms it acquired after the crisis to plug the
budget deficit, which this year is estimated to reach Rp 25.1
trillion.

Following BCA, the government will likely offer its remaining
5.53 percent in BII, the country's sixth largest lender.

Syahrial however said that the government was in no rush and
would not be hasty in the BII offering.

"We will wait for right moment in the market," he said.