IBRA may delay BCA share issue till March
IBRA may delay BCA share issue till March
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
may have to delay the crucial initial public offering (IPO) plans
of Bank Central Asia (BCA) until March because the agency has
been slow in registering the plans at the country's Capital
Market Supervisory Agency (Bapepam).
Head of IBRA's asset management and investment team Dasa
Sutanto confirmed on Sunday that the agency had not yet
registered the IPO plans.
"We'll do it first thing next week (this week)," he told The
Jakarta Post by phone.
The BCA IPO was set for February. But according to a Bapepam
ruling, an IPO plan must be registered at the capital market
watchdog 45 days before the primary offering is made.
Dasa said the February schedule was an IBRA internal target to
push its staff to work harder to realize the BCA IPO so that it
could meet the government's target of raising some Rp 17 trillion
(US$2.3 billion) in cash in the current fiscal year ending on
March 31.
He was confident the IPO could go through in March, while
saying the BCA IPO was crucial to restoring investors' confidence
in the country's ailing economy.
IBRA has said it plans to raise Rp 3 trillion in proceeds from
the BCA IPO by selling a 30 percent stake.
But Dasa said the agency could sell less than 30 percent if
there was a strong market demand for the BCA offering.
Asked why IBRA had been slow in making the registration at
Bapepam, Dasa said the agency had to focus first on improving
BCA's credit supervision department, which had been one of the
bank's greatest weaknesses.
He said a foreign bank had been assigned to do the job.
"We wanted to make sure everything was okay before we launched
the bank on the market," he said.
IBRA, a unit of the finance ministry, took over BCA in 1998
after its owners, the Salim Group and two children of former
president Soeharto, failed to repay the bank's debts to the
central bank.
BCA, the country's largest private bank, has total assets of
some Rp 84.4 trillion and operates some 767 branches throughout
the country.
IBRA has appointed Lehman Brothers, Merrill Lynch and local
securities firms PT Bahana Securities and PT Danareksa Securities
to manage the BCA IPO.
The agency controls some Rp 600 trillion worth of various
banking assets. It is mandated to sell or recover the assets to
raise cash to help finance the government's costly bank
restructuring and recapitalization program.
In the current fiscal year, IBRA must raise Rp 17 trillion to
help finance the Rp 34 trillion interest cost of the bank
restructuring and recapitalization bonds issued by the
government.
IBRA is targeted to raise some Rp 16 trillion in cash in the
coming fiscal year.
IBRA has said it had so far raised more than Rp 10 trillion in
cash and is confident that it could meet the Rp 17 trillion
target.
The BCA IPO and the plans to sell its 40 percent ownership in
the publicly listed auto giant PT Astra International would be
the major contributor to fulfilling that target.
But the planned sale of Astra seemed to fall into uncertainty
after IBRA was reportedly in a spat with Astra's Rini Soewandi-
led management team.
The agency has indicated that it is proposing to dismiss
Astra's current management team at an upcoming Feb. 8
extraordinary shareholders meeting.
IBRA has accused the management team of obstructing the
planned sale of its equity shares in the company to an American
investor consortium led by Newbridge Capital and Gilbert Global
Equity.
However, the management denied all the allegations, arguing
that it wanted only to ensure that all securities market
regulations and good corporate governance practices were fully
observed in the transaction.
Meanwhile, a "respected blue chip financial investor" has
reportedly offered a better price for IBRA's stake in Astra.
(rei)