Bank BRI upbeat about IPO plan despite problems<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
State Bank Rakyat Indonesia (BRI) is optimistic it will launch
\nits initial public offering (IPO) in October despite lingering
\nproblems that some say may cause a delay.<\/p>\n
BRI president Rudjito said on Monday that the government's
\nexperience in preparing the Bank Mandiri IPO has provided a
\nvaluable lesson to help ensure the success of BRI's offering.<\/p>\n
Bank Mandiri is another state bank that will offer a 20
\npercent share through an IPO early next month.<\/p>\n
BRI will sell up to a 30 percent stake late October as part of
\nthe government's 2003 privatization program.<\/p>\n
"What we have (the problems) in BRI is relatively no different
\nfrom those of Mandiri's. The problem-solving models are already
\nthere, we just need to copy that model with a bit of revision.<\/p>\n
"And we still have until October to fix things up," Rudjito
\ntold reporters before a hearing with House of Representatives
\nCommission IX on financial affairs.<\/p>\n
However, as in the case of Mandiri -- in which the IPO plan
\nhad to be delayed several times -- BRI also has some unsettled
\nproblems that have the potential to delay the IPO.<\/p>\n
Among other things, the potential obstacles revolve around two
\nissues: uncertainty about the status of the bank's accumulated
\nlosses posted when it was recapitalized in 1999, amounting to Rp
\n26 trillion, and a settlement scheme on the bank's tax arrears.
\nWhen the government rescued the bank, the former covered most of
\nthe latter's financial obligations. This is seen as a gain for
\nthe bank and is thus subject to taxation.<\/p>\n
These were the same problems that contributed to the delay in
\nMandiri's IPO plan, before the government stepped in and settled
\nthem by issuing rulings, in the form of presidential decrees, to
\nclear the way for the sale.<\/p>\n
Asked whether rulings would be issued in the case of BRI,
\nRudjito refused to give a specific answer, saying it would be up
\nto the government as the bank's majority shareholder.<\/p>\n
In the first quarter of this year BRI posted a gross profit of
\nRp 731 billion, up from the Rp 535 billion in the same period
\nlast year, on higher interest revenue from loans.<\/p>\n
The bank has said it would continue to boost profits from its
\nlendings, adding that it would unload around Rp 2 trillion worth
\nof recapitalization bonds next year. The bank holds a total of Rp
\n29 trillion worth of recap bonds.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bank-bri-upbeat-about-ipo-plan-despite-problems-1447893297",
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