Nine investors to make final bids for stake in BCA

Tantri Yuliandini, The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) announced on Monday it had shortlisted nine investors to join the final bid for the government's 51 percent stake in publicly-listed Bank Central Asia (BCA).

Indonesian Bank Restructuring Agency (IBRA) Chairman I Putu Gede Ary Suta said the bidders were expected to submit their final bids in the third week of December.

"The signing of the sale and purchase agreement, scheduled for the fourth week of December, will be done in parallel with a fit and proper test carried out by (Bank Indonesia)," he told a media conference in Jakarta on Monday.

There had been concern earlier that the government might fail to sell the BCA shares by the end of this year due to weak market sentiment and previous opposition from legislators.

The BCA divestment program is one of the country's key economic programs already agreed with the International Monetary Fund. The proceeds from the sale would help finance the 2001 state budget deficit, which is estimated to stand at 3.7 percent of the gross domestic product.

The shortlisted local and foreign investors are: the Malaysian Plantation Group, represented by Andalan Artha Advisindo; Bank Mega Consortium, represented by Bhakti Capital; Thailand's Dynamic Choice, represented by Credit Agricole; the United State's Farallon Capital, representing itself; the Indonesian Batik Cooperatives Association (GKBI), Newbridge, Rifan and Saratoga, represented by GKBI Investment; Indonesia Recovery Fund Limited, represented by IRCL; Berca Consortium, represented by JP Morgan Securities; a Bank Panin consortium of shareholders, represented by Trimegah Securities.

Also shortlisted is a foreign bank that refused to be disclosed at this time.

The nine investors were shortlisted from 15 bidders that had joined the preliminary bids to acquire BCA, the country's largest retail bank.

The nine were selected on the basis that they were prime banks or financial institutions with a good reputation, formed a clear consortium backed by banks or financial institutions with a good reputation and had a long-term commitment to investment in Indonesia, Ary Suta said.

The investors had also to be in sound financial condition with a clear and reliable source of funds, not be included in the Bank Indonesia list of bad bankers and not be affiliated directly or indirectly with the Salim family, BCA's founding owner.

The government spent billions of dollars in bonds to bailout and nationalize BCA in 1998 during the height of the country's financial crisis.

The Salim family was barred from reentering the bank because it had violated the country's legal lending limit for banks by forcing BCA to channel most of its money into other Salim businesses. Legislators also insisted the government keep Salim away from BCA.

Elsewhere, Ary Suta said he was optimistic that the sale would go ahead according to plan and that it would be finalized before the end of the year.

Earlier reports quoted Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti as saying that there was a slim likelihood of the deal going through by the end of the year due to drawn-out talks with legislators earlier, when seeking their approval of the sale.