Kwik supports IBRA bid to replace Astra management
JAKARTA (JP): Kwik Kian Gie said here on Thursday he supported IBRA's bid to replace the management of publicly-listed PT Astra International in order to push through the sale of its 40 percent stake in the company.
But the coordinating minister for the economy, finance and industry added that he would summon Indonesian Bank Restructuring Agency chief Cacuk Sudarijanto to question him about the reported second bidder for the agency's stake in Astra.
Cacuk did the right thing, Kwik said at the House of Representatives, referring to IBRA's request that Astra's extraordinary shareholders meeting on Feb. 8 replace the company's Rini Soewandi-led management team.
IBRA has accused Astra's management of obstructing the planned sale of its equity shares in the company to an American investor consortium led by Newbridge Capital and Gilbert Global Equity Capital Asia Ltd.
"Yes, it does," Kwik added, replying to whether his support of IBRA also included its bid to unseat the Astra management and replace it with a team more cooperative to IBRA's planned sale to the investor consortium.
Separately, Cacuk was quoted as confirming on Thursday that Newbridge/Gilbert consortium had been required to pay upfront around Rp 1 trillion or 30 percent of the purchase price of the IBRA stake in Astra into an escrow account as a downpayment to support its commitment.
Cacuk told news conference on Wednesday that he would push ahead with the bid to replace Astra's management in order to speed up the sale of IBRA's equity in the country's largest car company.
Cacuk added that IBRA was under great pressure to meet its target of raising at least Rp 17 trillion (US$2.36 billion) from the sale of assets under its control during the current fiscal year ending in March.
The Astra management has repeatedly denied IBRA's allegations that it is attempting to thwart the agency's deal with the investor consortium, saying that it merely wants the transaction to be transparent and within the rules governing the securities market.
According to a letter sent this week by Credit Lyonnais Securities (Asia) Ltd. (CLSA) to Cacuk, an unnamed "respected blue chip financial investor" was offering to pay a premium on IBRA's minimum stated price of Rp 3,750 a share for its stake in Astra.
The letter promised a speedy conclusion to the matter if IBRA agreed to sell its stake in Astra to this second bidder.
The new bidder is promising to work with, not against, Astra's management to ensure a quick asset sale and is offering to support Astra's planned rights issue, according to the letter, which Dow Jones Newswires obtained.
CLSA says its client can carry out a due diligence on Astra within two weeks of signing a purchase agreement with IBRA, due to the substantial work that has already been completed.
Cacuk also confirmed on Thursday that he had received the letter from CLSA.
But he said he did not find in the letter any better offer from CLSA like what was reported in the media.
CLSA, he said, even refused to simply name the real investors behind it unless IBRA made a strong commitment to selling its stake to them.
"Then I asked them (CLSA), 'Is it ethical for IBRA to first break up its deal with Newbridge, only so that you would tell me who are behind you?'," Cacuk said.
Nevertheless, Cacuk said any new offer would be welcomed. Any new investors interested in the IBRA Astra stake could present their bids when the government opened the second round of bidding for Astra shares.
Newbridge/Gilbert has accused the Astra management of obstructing a due diligence it intended to conduct on the company as part of its deal with IBRA.
Astra's management denied it was hindering the due diligence, saying it only wished to ensure it conformed with securities market rules and other regulations.
CSLA is one of two foreign banks vying to advise Astra on its planned rights issue, thus giving its unknown bidder a head start on a full assessment of the company's financial position. The other bank is ING Barings.
The unnamed investor is also willing to pay IBRA for roughly half of its Astra shares now and the remainder at a later date, CLSA said.
Under its agreement with IBRA, Newbridge/Gilbert will pay only Rp 3,000 per share if it purchases less than 30 percentage points of the agency's stake.
Astra is considered the jewel among the Rp 600 trillion in equities and bad debts under IBRA's control, and the successful sale of the Astra shares to a foreign investor is seen as crucial to enticing more investors to buy assets from the agency.
IBRA has also said at least three new investors are interested in the Astra stake, but Newbridge was named the preferred bidder because it offered the highest price.
According to the agreement signed by IBRA and the Newbridge/Gilbert consortium, the investor group is entitled to a breakup fee of up to $1.5 million if the deal falls through. (rei/rid)