Fri, 25 Feb 2000

IBRA signs agreement with Astra management

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) has signed a confidentiality agreement with the management of auto manufacturer PT Astra International to allow bidders access to complete a timely due diligence of the company.

Agency chairman Cacuk Sudarijanto said on Thursday the agreement demonstrated the support of Astra's management for the sale of IBRA's 40 percent stake in the publicly listed automotive company.

"We reached this agreement to accelerate the tender process for Astra," Cacuk said during a media conference.

IBRA announced on Wednesday it had appointed three consortiums to compete for the Astra stake. They are Singapore auto distributor Cycle & Carriage Ltd. Consortium, with partners Batavia Investment Management and JP Morgan International Capital; the American consortium of Gilbert Global Equity Partners, Newbridge Asia II, Chase Asia Equity and Saratoga Investama Sedaya; and the Lazard Consortium from France.

Cacuk said the three consortiums would eventually sign an agreement with the Astra management.

He said the due diligence process would begin on Monday and was expected to be completed on March 17.

Under the confidentiality agreement, any bidders appointed by IBRA to conduct a due diligence are prohibited from leaking any information on Astra, Cacuk said.

IBRA's earlier attempt to sell its Astra stake to preferred bidder Gilbert and Newbridge was unsuccessful due to reported efforts by the previous Astra management, led by then president Rini Soewandi, to prevent the consortium from conducting a due diligence.

After a months-long standoff, IBRA unseated Rini earlier this month, replacing her with Theodore P. Rachmat.

Astra is one of IBRA's prime assets to be sold to investors in a bid to raise Rp 17 trillion to help finance the current state budget ending on March 31. The agency expects to raise at least Rp 3 trillion from the sale of its Astra stake.

Meanwhile, IBRA senior official Mardy Sutanto said that during the three-week due diligence period, the three consortiums would be given the opportunity to meet with Astra's management to discuss the company's business plans.

He added that the consortiums also would be given access to Astra's facilities.

Mardy said the three consortiums were expected to submit their final bids on March 23 at no later than 5 p.m. He said IBRA would select the winning bid on March 25.

Asked whether three weeks was a sufficient amount of time for the prospective investors to complete a due diligence, Mardy said: "We're optimistic, particularly with the help of the Astra management."

Cacuk said the agency would select the bid which offered the highest price for the stake.

There have been rumors the government favored the Gilbert and Newbridge consortium because it includes Saratoga Investama, a company owned by Edwin Soeryadjaja, son of Astra founder William Soeryadjaja.

The Soeryadjaja family was forced out of Astra in 1992 following a controversial deal that put control of Astra in the hands of several conglomerates close to former president Soeharto.

These conglomerates later surrendered their shares in Astra to IBRA to repay their debts to the government.

The Soeryadjaja family is known to be close with President Abdurrahman Wahid. (rei)