BCA drops Permata plan, Danamon to seek approval<\/p>\n
Rendi A. Witular, Jakarta<\/p>\n
Publicly listed Bank Central Asia (BCA), the country's second
\nlargest bank in terms of assets, has canceled plans to join
\nbidding for a controlling stake in Bank Permata, a senior
\nofficial said.<\/p>\n
BCA finance director Jahja Setiaatmadja said the bank's board
\nof commissioners and a number of shareholders had rejected the
\nplan because the bank could not play a deciding role in the
\nplanned financial consortium set up for the Permata bid.<\/p>\n
\"The board of commissioners rejected our plan because they
\nconsidered it unfeasible and not strategic, since our part in the
\nconsortium would be small,\" Jahja told The Jakarta Post in a
\ntelephone interview on Tuesday.<\/p>\n
\"We needed to play a greater role in the consortium in order
\nto have full control over Permata's operations. But as you known,
\ncentral bank regulations limit us from doing that,\" he said.<\/p>\n
BCA, which is controlled by U.S-based Farralon Capital and
\nlocal cigarette producer PT Djarum, needed to form a consortium
\nto be able to participate in the Permata tender, since banking
\nregulations limit the size of a bank's investment in a single
\nentity to no more than 10 percent of its net equity.<\/p>\n
As of the first quarter of this year, BCA had an equity of Rp
\n13.46 trillion (US$1.5 billion) and assets valued at Rp 136.2
\ntrillion.<\/p>\n
Shares of BCA ended unchanged at Rp 1,875 on the Jakarta Stock
\nExchange (JSX) on Tuesday.<\/p>\n
The government, which has a 97.17 percent stake in publicly
\nlisted Permata, plans to sell 71 percent of its stake later this
\nyear to raise cash to help finance the state budget deficit.<\/p>\n
The government, which is expected to reap around Rp 3 trillion
\nfrom the Permata sale, has extended its schedule to announce the
\nwinner of the bid to December from November, due to the
\nelections.<\/p>\n
Elsewhere, publicly listed Bank Danamon, the country's fifth
\nlargest bank in terms of assets, said that it was still seeking
\napproval from its board of commissioners in order to participate
\nin the Permata tender.<\/p>\n
Danamon president director Francis Andrew Rozario said the
\nbank was in the final stage of evaluating the advantages and
\ndisadvantages of acquiring Permata.<\/p>\n
\"We haven't really approached anyone yet to form a consortium
\nfor the bid, since we are still finalizing the plan. We expect
\napproval from the commissioners in the middle of August,\" said
\nRozario before a press conference on Tuesday.<\/p>\n
Rozario said that Danamon would only contribute a maximum of
\n25 percent to the consortium due to the limitation stated in
\nbanking regulations.<\/p>\n
Asia Financial Indonesia Pte. Ltd (AFI), a consortium of
\nSingapore's Temasek Holdings Pte. Ltd. and Germany's Deutsche
\nBank, is the controller of Danamon.<\/p>\n
Danamon shares ended lower by Rp 50 to Rp 3,325 on the JSX on
\nTuesday.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bca-drops-permata-plan-danamon-to-seek-approval-1447893297",
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"sponsor": "Okusi Associates",
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