IBRA plans open tender for Astra stake

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) confirmed on Tuesday it did not extend its controversial agreement with Newbridge/Gilbert investor consortium but will invite bids for its 40 percent stake in PT Astra International instead.

IBRA spokesman Franklin Richard told reporters that the U.S. investor group led by Newbridge Capital and Gilbert Global Equity Partners is no longer the preferred bidder and other investors soon would have a chance to acquire the stake through open bidding.

"No, we did not extend our exclusivity agreement with Newbridge/Gilbert that ended on Monday; but they are free to take part in the open tender ," Franklin said.

He declined to discuss reasons behind the move, but informed sources said the main factor seemed to be Newbridge/Gilbert's failure to deposit a 30 percent up front payment to an escrow account to support its commitment.

Franklin said technical details for the open tender would be announced shortly after the return of IBRA chief Cacuk Sudarijanto, now in Europe as a member of President Abdurrahman Wahid's entourage.

Meanwhile, French and Philippine groups have reportedly notified IBRA of their interest in participating in an open tender for the Astra shares.

France-based Lazard Freres & Co., along with its financial adviser, Credit Lyonnais, leads one of the two new groups. The other interested party is Philippine businessman John Gokongwei of JG Summit Holdings Inc. and his financial adviser, Goldman Sachs of the U.S.

Separately Astra president Rini Soewandi was quoted on Tuesday as saying that financier George Soros and PT Bhakti Investama had also approached IBRA with a bid to buy the stake.

Soros' Quantum Fund has a minority stake in Bhakti.

However, Newbridge/Gilbert has not been officially notified of the termination of the agreement, according to a local adviser to the investor group.

"But if true, the move would be detrimental to foreign investor interests in IBRA assets," the adviser said, adding that Newbridge/Gilbert had thus far spent over US$800,000 for negotiations and preparations for due diligence, which was put on hold. The investor group claimed the due diligence was obstructed by Astra management and the securities watchdog (Bapepam).

IBRA, under pressure to sell its Astra shares before the end of March, in order to meet its target of Rp 17 trillion (US$2.2 billion) for the state budget, chose Newbridge/Gilbert last month as the preferred bidder with a floor price of Rp 3,750 per share.

However, most analysts and the Astra management have attacked the selection of Newbridge/Gilbert for its lack of transparency, saying that an open competitive bid would be the best way to get the highest value for the Astra shares.

Negotiations with Astra's management have turned increasingly acrimonious as it refused to answer hundreds of detailed questions from Newbridge/Gilbert, saying the information requested was proprietary and sensitive and could be used by competitors.

Astra management has denied it obstructed the process of due diligence, saying that it asked only for a confidentiality agreement to protect the interests of the company, other shareholders and Astra directors themselves for any legal consequences arising from divulging proprietary information.

Frustrated with the process, IBRA proposed that Astra's extraordinary shareholders meeting next week replace the current Astra management to facilitate the due diligence.

IBRA said on Tuesday that the expiration of the agreement with Newbridge/Gilbert would not affect Astra's extraordinary shareholders meeting next Tuesday where the agency would ask for the replacement of the Astra management to facilitate the sale of its stake in Astra, Indonesia's largest automobile company. (rid)