Foreign banks eye Bank Mandiri's IPO business<\/p>\n
JAKARTA (JP): President of the giant Bank Mandiri E.C.W. Neloe
\nsaid on Tuesday that several foreign investment banks had
\nsweetened their offers in a bid to win the underwriting business
\nof the state-owned bank's initial public offering (IPO).<\/p>\n
Neloe said that the incentives included a loan of up to US$100
\nmillion or the purchase of the bank's recapitalization bond worth
\nup to $300 million.<\/p>\n
\"This will provide a multiplier effect to our IPO,\" he told
\nthe House of Representatives commission IX on state budget and
\nfinance during a working meeting.<\/p>\n
\"We hope you (the legislature) will support our IPO plan,\" he
\nadded.<\/p>\n
Bank Mandiri plans to sell around 30 percent of its stake
\nthrough IPO sometime in October in a bid to raise around $600
\nmillion.<\/p>\n
\"We expect 80 percent of the IPO will be subscribed by foreign
\ninvestors,\" Neloe said, adding that the bank planned a dual
\nlisting at home and abroad.<\/p>\n
Several foreign investment banks have indicated their interest
\nto become the lead underwriter of the IPO. The banks include
\nDeutsche Bank, Lehman Brothers, JP Morgan, Merrill Lynch, ABN
\nAmro, Salomon Smith Barney, and C.S. Boston.<\/p>\n
Neloe said that Bank Mandiri would only appoint one lead
\nunderwriter for the overseas offering and one local firm for
\ndomestic offering.<\/p>\n
The $100 million loan, if the government and Bank Mandiri
\nchoose to accept it, would be the first such loan of that size
\noffered by a private foreign creditor to local entities since the
\neconomic and financial crisis started in the middle of 1997. This
\nwould not only benefit the bank but would also help encourage
\nother lenders to resume lending to local companies.<\/p>\n
The purchase of bank recapitalization bonds would help the
\ngovernment in its efforts to activate the local bond secondary
\nmarket.<\/p>\n
Elsewhere, Neloe told legislators that the IPO must be
\nimplemented this year because if it was delayed until 2002, the
\nIPO market would be flooded by other similar IPOs particularly
\nfrom China.<\/p>\n
Neloe also expected the government to allow the IPO to be
\nlaunched as a primary issue, in which all the proceeds would be
\nused for the bank's capital, not for financing the state budget
\ndeficit.<\/p>\n
\"We are proposing a primary issue. The government can raise
\ncash through a secondary issue at the latter stage,\" he said,
\nadding that Bank Mandiri had yet to obtain government approval
\nfor the primary issue plan.<\/p>\n
He said that investors would be attracted to the IPO if it was
\nlaunched as a primary issue.<\/p>\n
Texmaco<\/p>\n
Meanwhile, Neloe confirmed reports that four companies of the
\nintegrated textile giant Texmaco group had asked for a $60
\nmillion loan facility from the bank to finance the supply of
\ntrucks and buses by the government for military and civilian use.<\/p>\n
But Neloe said that the bank had not yet decided whether to
\napprove the credit demand, saying that the bank would first talk
\nwith the Indonesian Bank Restructuring Agency (IBRA) over the
\nrestructuring of Texmaco debt owed to the agency.<\/p>\n
\"We also want a senior lender status,\" he added.<\/p>\n
Texmaco had been hit by controversy after a minister late in
\n1999 alleged the group used its political clout to force a state
\nbank to provide a massive loan.<\/p>\n
The restructuring of Texmaco's huge debt to IBRA had also been
\ncriticized because of the seemingly favorable terms for the
\ndebtor. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/foreign-banks-eye-bank-mandiris-ipo-business-1447893297",
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