Tue, 08 Feb 2000

IBRA receives five bids for stake in Astra

JAKARTA (JP): Chairman of the Indonesian Bank Restructuring Agency (IBRA) Cacuk Sudarijanto said on Monday the agency had received at least five bids for its 45 percent stake in the publicly listed auto giant PT Astra International after it opened fresh bidding on Friday.

Cacuk said this was a good signal as it indicated that foreign investors were still interested in Astra despite the botched-up deal between IBRA and an American investor group led by Newbridge/Gilbert.

Cacuk said he was optimistic that the Astra sale could be completed by March 25.

"There are already five bids which have landed on my table," he said at a televised debate.

He declined to name the investors and their price offer but said IBRA had sent invitations to about 40 potential investors to join in the bid for Astra.

He reaffirmed that the agency was expecting a minimum price of about Rp 4,000 (US$0.53) per share for the Astra sale.

This, Cacuk said, was based on the price offered by Credit Lyonnais Securities Asia (CLSA), which is advising France-based Lazard Freres & Co., in its letter to IBRA last month.

Cacuk said IBRA could not follow up the CLSA offer at the time because the agency was still bound to an exclusivity agreement with the Newbridge/Gilbert consortium, which only expired on Jan. 31.

This agreement was not extended because the consortium failed to conduct due diligence on Astra and provide a 30 percent up-front payment.

"Now everyone is free to join in the bid. I hope Credit Lyonnais is still interested, and I expect the price (offer) to remain at about Rp 4,000 so that this can be the benchmark for other investors," he said.

IBRA is expected to raise more than Rp 3 trillion from the Astra sale in a bid to meet its target of raising Rp 17 trillion to help finance the current state budget ending on March 31.

Cacuk said the agency had so far earned Rp 10.5 trillion from its asset sales and loan recovery, but IBRA senior deputy chairman Arwin Rasyid earlier said the agency had raised more than Rp 12 trillion.

Another massive IBRA deal expected to be completed next month is the initial public offering (IPO) of Bank Central Asia (BCA) with the target of raising at least Rp 3 trillion.

Cacuk said the Astra deal must be completed before the March 25 deadline, not only because it was important to meet the Rp 17 trillion revenue target for the state budget but because a smooth transaction would send a strong signal to foreign investors that the government was serious about its plans to dispose of bank assets controlled by the agency.

IBRA has been criticized by both investors and the International Monetary Fund (IMF) for being too slow in disposing of its assets, estimated at around Rp 600 trillion (book value).

"Our mandate is to expedite the sale process, but not through fire sales," said Cacuk, who was appointed IBRA chairman early last month.

Cacuk also reaffirmed the agency's determination to change Astra's management at a shareholders meeting on Tuesday.

IBRA has accused the Rini Soewandi-led management team of obstructing the Astra sale process with the Newbridge/Gilbert consortium.

Separately, Rini reiterated on Monday that Astra's management did not have any intention of obstructing IBRA's efforts in selling its Astra stake, nor did it seek to block foreign investors entering the company, as implied in some newspaper reports.

"Our only concern is that the transaction be done transparently and fairly, according to securities market regulations and good governance practices," Rini told a crowded news conference.

At the conference, the Astra chief executive released copies of a letter she earlier sent to President Abddurrahman Wahid, who is now on an overseas visit, where she clarified the controversy over the allegation that she had deliberately obstructed IBRA's deal with an American investor consortium led by Newbridge Capital and Gilbert Global Equity Partners.

"What we are opposed to is the nontransparent manner in which IBRA appointed Newbridge/Gilbert as the preferred bidder," Rini added.

The consortium complained that it wasn't able to conduct due diligence on Astra and to meet the deadline for concluding a definitive agreement because of a completely uncooperative attitude on the part of Astra's management.

Frustrated by this process, IBRA asked in early December for an extraordinary meeting of Astra's shareholders on Feb. 8 and proposed a replacement of management.

IBRA is accepting bids from interested investors up to Feb. 23, when it will publish a shortlist. A week later, those on the shortlist will have the opportunity to conduct due diligence on the company, and must place final bids by March 20.

The successful bidder will be announced on March 25. (rei)