Mon, 08 Nov 1999

IBRA to sell BCA shares through IPO

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) will sell about 30 percent of the shares it holds in Bank Central Asia (BCA) in an initial public offering (IPO) in February, an official at the agency said.

The head of IBRA's asset management and investment team, Dasa Sutanto, said on Friday a financial audit of the bank was still being conducted and the agency would seek approval for the IPO from the country's Capital Market Supervisory Agency in December.

Speaking to reporters during a break in a seminar, Dasa said the due diligence report would be completed within a month.

IBRA has appointed Lehman Brothers, Merrill Lynch and local securities firms PT Bahana Securities and PT Danareksa Securities to oversee the IPO.

The agency initially planned to sell the BCA shares in December, but had to delay the offering due to fallout caused by the high-profile Bank Bali scandal.

IBRA, a unit of the finance ministry, took over BCA last year after its owners, the Salim Group and a number of former president Soeharto's children, failed to repay the bank's debts to the government.

BCA, one of the country's largest private banks, has total assets amounting to some Rp 84.4 trillion and operates some 767 branches throughout the country.

IBRA has yet to set the price for the shares, but the agency has repeatedly said it is determined to maximize profits from the sale.

The agency is raising funds by selling over Rp 600 trillion worth of assets under its control to help finance the country's bank restructuring program, which is estimated will cost some Rp 550 trillion.

In the current fiscal year ending in March 2000, the agency is attempting to raise at least Rp 17 trillion. IBRA has so far raised only some Rp 8.9 trillion of this amount.

The agency also plans to sell other assets under its control in the near future, including around half of its 40 percent stake in publicly listed auto giant PT Astra International, integrated shrimp firm PT Dipasena and a plantation firm.

The agency also will sell its stakes in recapitalized private banks. The government has recapitalized several major private banks, with IBRA injecting some 80 percent of the required recapitalization funding.

The agency expects the market will be more favorable for IPOs following the election of a new government and improving relations with the International Monetary Fund in the wake of the publication of the PricewaterhouseCoopers audit of the Bank Bali scandal. (rei)