IBRA prepares for BCA retender, official says
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) is preparing the "relaunch" of a tender process for a 30 percent government stake in Bank Central Asia (BCA), after it seemingly failed to obtain a good bid in the first round, according to IBRA chairman I Putu Gede Ary Suta.
Ary Suta said Monday that plans to relaunch the tender followed the decision made by State Minister of State Enterprises Laksamana Sukardi, who now supervises IBRA.
"The Minister has reached a decision about BCA; now we'll just have to carry it out, and prepare all we need for the relaunching," he told reporters prior to a meeting with a visiting team from the International Monetary Fund (IMF).
He said IBRA would open the tender for new comers and current bidders, providing they met all requirements.
"I think it's only fair to give everyone a chance to participate," he said.
Asked whether the government would alter the composition of BCA shares it would offer, he said that it was unlikely, though possible.
"It depends, the minister (Laksamana) will have to report this (relaunching) to legislators," Ary Suta said.
In March, legislators approved the sale of a 40 percent stake in BCA. By July, the government had sold the first 10 percent through a secondary public offering.
The tender process for the other 30 percent stake, however, has mostly been shrouded in secrecy by IBRA. It remains unclear how far the tender process has progressed since it was launched earlier this year.
In May, IBRA said that more than 10 local and foreign investors had submitted their bids for BCA stakes.
Sources close to the process, however, said only two bidders thus far remained.
IBRA declined to reveal their identities, but unconfirmed reports named investment firms Indonesia Recovery Company Limited (IRCL) and Newbridge Capital from America.
IRCL is a joint venture between local firm Bhakti Capital Investama, and Hong Kong's Asia Debt Management.
Many believe Bhakti to be a proxy for BCA's former owner, the Salim Group, which is trying to claw its way back into the bank.
Newbridge had earlier tried to acquire IBRA's stakes in PT Astra International, and Salim's giant palm plantation units. In both attempts, the U.S. investment firm failed.
The divestment of BCA is part of the economic reform targets set out under a lending agreement with the IMF.
Under a draft of this agreement, known as the Letter of Intent (LoI), IBRA must finalize the sale by September.
The agency was supposed to complete the sale last year, but legislators blocked the move over concerns that the then unfavorable market conditions would drive BCA's share price down.
The BCA issue, and other reform targets missed last year prompted the IMF to suspend a US$400 million loan tranche from December.
Now, delays continue to plague BCA sales. IBRA should have announced the final bidders by late June, but canceled the announcement, saying it wanted to pursue a better deal.
BCA was once the country's largest private bank before the government nationalized it over failure to repay debts it owed to Bank Indonesia.
Strong in the retail market, BCA is seen as among the few assets under IBRA capable of attracting high-paying bidders.
However, IBRA's indecision over the sales, and a looming IMF deadline, are likely to weaken the agency's bargaining position for the highest possible price from the bidders.
IBRA itself is depending on successful BCA sales, hoping it can catch up on its revenue target for this year.
Under the 2001 state budget, IBRA's contribution should stand at Rp 27 trillion (about $3.15 billion) by the end of this year.
But throughout the first semester, it managed to secure less than half of its target, or just Rp 11.2 trillion.(bkm)