No IMF intervention in BCA sale approval: DPR

No IMF intervention in BCA sale approval: DPR

JAKARTA (JP): Lawmakers denied on Thursday that the
International Monetary Fund (IMF) stepped in to persuade the
House to approve the government plan to sell a 51 percent stake
in Bank Central Asia (BCA) to foreign strategic investors.

"No, there was no pressure from the IMF for us to endorse the
divestment plan," Aberson Marle Sihaloho, a legislator from the
Indonesian Democratic Party of Struggle (PDI Perjuangan), who is
known as a strong opponent of the sale program, told the Jakarta
Post.

"The approval was based merely on the realization that selling
BCA now was more beneficial to the country's economy than to keep
it in the hands of the government," he said.

"We endorsed it because the divestment would bring about Rp
5.2 trillion (US$570 million) into the state's coffers, and that
would be enough to cover the cost of bailing out BCA," said
Golkar legislator Paskah Suzzeta.

The BCA sale program was supposed to be completed late last
year but was blocked by legislators who argued that the
unfavorable market condition at the time would force the
government to sell local assets to foreigners at a cheap price.

The delay had caused the IMF to suspend its loan program to
the country.

Earlier this week, several hours before the IMF board of
executives were due to decide on the resumption of the loan
program, IMF Asia Pacific director Yusuke Horiguchi flew to
Jakarta to convince top lawmakers of the importance of the BCA
divestment program for the country's economic recovery.

The House made the approval late on Wednesday, after it
delayed several times a scheduled meeting with the government on
the BCA sale program.

But the legislators suggested that the divestment program be
implemented in two stages: selling 30 percent first, and 21
percent in the second round.

Analysts said that such a requirement might discourage foreign
bidders who want to gain control over the bank and were ready to
pay a premium.

"The House's requirement to sell the 51 percent stake in two
stages may force strategic partners to think twice because there
is no guarantee that the remaining 21 percent would go to them,"
PT Danareksa economist Raden Pardede said.

"Even if the 21 percent is placed under a put option, past
records show that Indonesia often does not honor its contracts,"
he added.

The government said that it wanted to sell BCA at Rp 1,750 per
share, which is a 25 percent premium of the bank's current share
price and raises total proceeds to Rp 5.2 trillion.

However, given the above legislators' requirement, the
government might not be able to obtain the desired premium price.

Meanwhile, legislator Syamsul Balda of the Reform faction said
that U.S. Newbridge Capital, which was named as one of the two
early bidders, had lobbied the government to sell the 51 percent
stake.

Separately, State Minister of State Enterprises Laksamana
Sukardi told the media that the government would still sell the
51 percent stake in one stage as planned to obtain a premium
price.(03)