IBRA plans open tender for Astra stake

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)