IBRA won't delay BCA IPO amid dull market<\/p>\n
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
\nwon't delay its overseas road show plan for the initial public
\noffering (IPO) of Bank Central Asia (BCA) despite the sluggish
\nconditions in international stock markets, according to agency
\ndeputy chairman Jerry Ng.<\/p>\n
Jerry expressed optimism that the market would remain
\nenthusiastic for the BCA IPO.<\/p>\n
\"We'll be consistent with our plans... Stock markets always
\ngo up and down, so we don't have to be worried,\" he told The
\nJakarta Post and Kompas dailies on Tuesday.<\/p>\n
IBRA is planning to make overseas presentations to several
\ninternational financial centers in a pre-marketing exercise to
\ngenerate interest in the BCA IPO. The road show will last from
\nApril 26 to May 9.<\/p>\n
IBRA plans to divest between 15 percent and 30 percent of BCA
\nshares through an IPO on May 19-23. The indicated price is set
\nat Rp 1,350 to Rp 1,750 per share.<\/p>\n
The divestment plan is part of efforts by IBRA to raise Rp
\n18.9 trillion this year to help finance the 2000 state budget.<\/p>\n
IBRA nationalized BCA in 1998 after the bank's former owners
\ncould not repay debts to the government; the bank also breached
\nthe legal lending limit ruling.<\/p>\n
World stock markets are currently under pressure after
\ninvestors and institutions in the U.S. dumped shares on Friday
\ncausing the DOW industrial index and the tech heavy Nasdaq
\ncomposite index to plunge.<\/p>\n
The Jakarta Stock Exchange plunged 4.9 percent on Monday, and
\ncontinued to fall by 0.2 percent on Tuesday with the composite
\nindex closing at 528.259 points.<\/p>\n
Bank Niaga, Danamon<\/p>\n
Separately, Jerry said at a press conference that IBRA
\nexpected publicly listed Bank Niaga to be recapitalized this week
\nby injection of some Rp 8.67 trillion in recapitalization bonds.<\/p>\n
The government initially planned to recapitalize Bank Niaga,
\nalso a nationalized bank, last month.<\/p>\n
Jerry also reported that the planned merger of Bank Danamon
\nwith eight other nationalized banks was on track.<\/p>\n
He said that the legal merger would be completed by the end of
\nMay and the operational merger would be realized in September.
\nBank Danamon was nationalized by IBRA in 1998 and it has already
\nbeen recapitalized by the government.<\/p>\n
Jerry said that the government had to inject another Rp 30
\ntrillion in recapitalization funds into Bank Danamon to allow it
\nto acquire the eight non-recapitalized banks without having to
\nsuffer a negative capital adequacy ratio (CAR).<\/p>\n
The eight smaller banks still have a negative CAR because they
\nhave not been recapitalized.<\/p>\n
Jerry said that Bank Danamon would have a CAR level beyond the
\nminimum 4 percent requirement after the merger was completed.
\n(rei)<\/p>",
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