Two groups submit bid for IBRA's Astra stake

JAKARTA (JP): Only two of the three shortlisted investor consortia submitted final bids for the Indonesian Bank Restructuring Agency's (IBRA) 45 percent stake in PT Astra International on Thursday, and the winner will be announced on Friday, one day ahead of schedule.

Only moments before receiving the bid documents, IBRA chairman Cacuk Sudarijanto said that the agency had decided to announce the winner on Friday instead of Saturday as originally scheduled.

"This new schedule will allow the winner to call its bank in New York," Cacuk added.

One of the three shortlisted bidders, the consortium led by Lazard Asia Fund, made a last minute decision to submit a joint bid with Singapore's Cycle & Carriage Ltd. consortium. This group includes Bhakti Investama and Batavia Investment Management.

The second bidder, led by Newbridge Capital of the U.S., includes PT Saratoga Investama Sedaya, Chase Asia Equity Partners, PT Nusantara Investment Fund, and Colony Capital.

Gilbert Global Equity Partners, which was previously the co- leader of the Newbridge consortium, dropped out of the bidding reportedly due to timing constraints.

The first group of bidders declined to say why they decided to submit a joint bid for the 1.04 billion Astra shares, but an informed source said that both Lazard and Cycle & Carriage encountered difficulties raising such a large amount of cash in such a short period of time.

"We definitely need the money (at the latest) by March 28," Cacuk added.

The bid documents were submitted to a notary and the presentation ceremony was attended by representatives of the mass media, the World Bank and the International Monetary Fund.

"I assure you that the transaction will be fair and transparent. The bid documents will be opened at the same time tomorrow," he said, apparently in a bid to alleviate worries about unfair conduct by IBRA.

"There will be no intervention from (people) higher than me, not even from the President. It will be entirely IBRA business," he added.

Cacuk said that price would be the most important factor in selecting the winner. Astra shares closed flat on Thursday at Rp 3,725.

Cacuk made the comment amid speculation that the government favored the Newbridge-led consortium which includes Saratoga Investama, a consulting company controlled by the Soeryadjaya family, the founder of Astra who had to "surrender" control of the company in 1993 to investors linked to former president Soeharto.

The Soeryadjaya family is also known to be close to President Abdurrahman Wahid.

Edwin Soeryadjaya of Saratoga declined to comment on this. He only said, "We're pleased to submit our bid."

Newbridge, together with Gilbert, was appointed the preferred bidder for the Astra stake last September, but the transaction failed following acrimonious debates with Astra management led by Rini Soewandi (since replaced) and controversy over alleged lack of transparency and the contentious issue of due diligence.

Cacuk said that as part of the effort to safeguard fairness within the bidding process, the Government of Singapore's Investment Corp., had not been allowed to participate in the due diligence process, and had not been allowed to review the terms and conditions submitted by the two bidders.

"This is because the Singapore investment company was included in both the Newbridge consortium and the Lazard consortium," he added.

The consortia have just completed a three-week due diligence on Astra, the country's largest carmaker, that also has large investments in plantations, heavy equipment, motorcycle and finance industries.

Cacuk dismissed reports that Malaysia's Kumpulan Guthrie, not included in the shorlist, had made a last minute bid.

"Until now, I have not received any paper (bid) from them," he said.

Cacuk added that the government would allow the winning bidder to pay in U.S. dollars based on Rp 7,460 per dollar, the middle rate prevailing on Wednesday.

Astra is considered the jewel among IBRA's prime assets and proceeds from the sale will contribute to the Rp 17 trillion revenue target to be raised by the agency in the current fiscal year ending March 31.

Cacuk declined to say how much cash he expected from the transaction but analysts said IBRA expected at least $500 million. The agency has so far raised around Rp 11 trillion.

The Astra sale will be the first high profile deal to be completed by the agency since its botched transaction with Standard Chartered Bank of Britain for Bank Bali late last year.

Cacuk said that a successful completion of the Astra deal would help revive confidence in the country's ailing economy.

Meanwhile, Astra President Theodore P. Rachmat, a cousin of Williamn Soeryadjaya, said he would welcome any winning bidder for the Astra stake.

"May the best bidder win," he said. (rei)