StanChart intensifies efforts to buy publicly-listed BCA
StanChart intensifies efforts to buy publicly-listed BCA
Dadan Wijaksana, The Jakarta Post, Jakarta
Already regarded as the most credible bidder, Standard Chartered
Bank Plc. (StanChart) is reported to have teamed up with the
Government of Singapore Investment Corporation (GIC), boosting
its chances of acquiring a 51 percent stake in Bank Central Asia
(BCA).
Quoting a report from the Far Eastern Economic Review,
newswire Dow Jones said that, with GIC on board, StanChart was
increasingly confident about its chances of controlling BCA.
The company has also sent its new CEO, Mervyn Devies, to
Jakarta, where he was expected to hold talks with, among others,
State Minister of State Enterprises Laksamana Sukardi and Bank
Indonesia Governor Sjahril Sabirin.
Meanwhile, Suryo Susilo, Head of the Communications Division
of the Indonesian Bank Restructuring Agency (IBRA), told The
Jakarta Post that he had yet to hear about the partnership.
The partnership will definitely pose a serious threat to other
bidders wishing to purchase a controlling block of shares in the
country's largest retail bank.
Moreover, the entrance of such a credible financial
institution into the bidding process would boost IBRA's faltering
attempts to regain investor confidence.
The success of the BCA divestment program is seen as decisive
in helping to burnish the country's already tarnished image
before the international community.
One thing should be kept in mind though: StanChart previously
had a bad experience when it came to taking control of a domestic
bank. Last year, it had to scrap its planned acquisition of Bank
Bali when the latter's employees fiercely opposed the
transaction.
IBRA is currently planning to sell a 51 percent stake in BCA
under a bidding process, with the strategic investors expected to
submit their final bid before the Jan. 28 deadline.
Since control was wrested from the bank's founder, the Salim
Group, in 1998, IBRA has faced difficulties in selling the bank,
due either to interference from legislators or unfavorable market
conditions.
Apart from StanChart, there are currently seven other official
bidders.
They are: U.S. investment firm Newbridge Capital, Farallon
Capital, Bank Mega Consortium, Dynamic Choice, Indonesia Recovery
Fund Limited, the Berca Consortium and a consortium of Bank Panin
shareholders led by PT Trimegah Securities.
In 1998, the government took over the ailing bank and spent
huge sums in bailing out and nationalizing BCA at the height of
the Asian financial crisis.
The government is barring Salim from reentering BCA, on the
grounds that it violated the legal lending limit regulations when
it forced the bank to channel most of the bailout funds to its
affiliated business firms.