Laksamana upbeat on BCA divestment
Tantri Yuliandini, The Jakarta Post, Jakarta
State Minister for State Enterprises Laksamana Sukardi on Monday downplayed fears that the privatization of Bank Central Asia (BCA) would not be completed within the year, saying that the process was still on target.
"I can confirm that the negotiations for the sale of BCA are still going on, and that it will still be possible to close the deal by the end of this year," he said on the sidelines of a seminar on Indonesian business prospects here.
He admitted, however, that the global economic climate was not favorable, and that with the gloomy outlook on corporate earnings sparked by the global economic slowdown, investors were now being very cautious about where they put their money.
"It (the sale of assets) is not as easy as it sounds," said Laksamana, whose office also oversees the Indonesian Bank Restructuring Agency (IBRA), which owns a majority stake in the giant BCA.
The government has plans to sell 51 percent of the shares in BCA by the end of this year. But last week, Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti expressed doubts that the BCA sale could be completed as scheduled.
Laksamana said that many potential investors had withdrawn their bids as they were intimidated by BCA's size and its position as Indonesia's largest private bank.
By contrast, he added, many were interested in the sale of the government's stake in Bank Niaga -- another asset due to be sold this year -- because of the ideal size of that bank.
"With Bank Niaga, the only problem concerns the conversion rate for its fixed rate bonds which need to be exchanged for variable rate bonds," Laksamana said, adding that the conversion rate was wholly up to the Ministry of Finance to decide.
He indicated that should the sale of BCA fail to materialize this year, the government would push for the sale of state-owned telecommunications company PT Telkom instead.
"Of course, we need to look for alternatives (to the BCA sale) and if we look at which companies are ready and have good markets, then we will see that Telkom is ready," he said.
Earlier, Telkom's president Muhammad Nazif criticized the government's desire to sell the telecoms giant this year at a time when the company's shares were trading at a discount.
Laksaman warned that in the worse case scenario where the privatization program failed altogether, everybody, and especially the government and legislators, would have to sacrifice their salaries to help plug the budget deficit.
The government has targeted the raising of around Rp 6.5 trillion (US$613 million) in privatization proceeds this year, but so far the figure raised has amounted to zero.
Laksamana said that the government expected to achieve a figure close to Rp 6.5 trillion from the sale of Telkom and Bank Niaga.
Elsewhere, Laksamana said that the privatization of plantation firm PT Socfindo would soon be completed with the sale of a 30 stake to investors.
"We'll sell it for about $40 million, and the deal will definitely be closed this year," he said.