IBRA to name winning bidder for BCA shares

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) will name the winning bidder for its stake in the publicly listed Bank Central Asia (BCA) next week, agency deputy chairwoman Felia Salim said on Tuesday.

"We'll name the winner between June 25 and June 28," Felia said following a meeting with Finance Minister Rizal Ramli.

She said that there were seven bidders competing to purchase the BCA shares.

"We're on schedule to complete the divestment of the BCA shares soon," she added. Felia declined to provide further details, including the size of shares to be sold by the agency.

The agency said late last month that there were 10 local and foreign institutional investors which had submitted bids for BCA shares.

The government nationalized BCA, the country's largest private bank, in 1998 in the aftermath of the devastating financial crisis. The government divested a 22.5 percent stake in BCA in May last year through an initial public offering (IPO).

The government was supposed to have further divested a majority stake in BCA late last year as part of an agreement with the International Monetary Fund, which is providing a multibillion dollar bail out loan to the country, but it was delayed due to the unfavorable market conditions at the time.

The delay had irked the IMF, prompting it to also delay the disbursement of its third loan tranche to the country.

The government has planned to divest another 40 percent stake in BCA this year. But the House insisted that the second divestment must be conducted via a combination of a private placement mechanism and secondary public offering.

Felia said last month that the agency was considering selling up to 30 percent shares in BCA to a strategic investor and the remaining 10 percent through secondary offering.

The House has also demanded that the former owner of BCA, the Salim Group, must not be allowed to reenter BCA by purchasing the bank's shares from IBRA.

The government via IBRA is also required to divest some 51 percent shares in the publicly listed Bank Niaga, which was also nationalized following the financial crisis.

IBRA plans to complete the Bank Niaga sale, entirely through strategic sales, some time in October.

IBRA is mandated to raise some Rp 27 trillion in cash this year to help finance the 2001 state budget deficit. So far the agency has managed to only raise just over Rp 7 trillion.

The proceeds from the share sales of BCA and Bank Niaga would contribute to the IBRA cash target.

There has been concern that amid current political uncertainty, the agency might not be able to meet the cash target, putting the 2001 state budget at risk.

The agency's asset sale program has also been undermined by massive political interference.

IBRA's recent deal with Malaysia's Kumpulan Guthrie Bhd, which had agreed to purchase palm oil plantations from the agency, nearly collapsed after some legislators protested the deal citing national interests.

Only after high level lobbying and protracted negotiations, did the deal go through.(rei)