Lippo Group's restructuring plan approved<\/p>\n
JAKARTA (JP): The Lippo Group announced yesterday that the
\nindependent shareholders of both PT Lippo Securities and PT Lippo
\nLife had approved its plan to radically restructure the two
\nfinance companies.<\/p>\n
The group's chief executive, Roy E. Tirtadji, told journalists
\nyesterday that 65 percent of Lippo Life's independent
\nshareholders had attended an extraordinary meeting yesterday, and
\napproximately 95 percent of them had approved the company's
\nproposal to acquire a 40 percent stake in Lippo Bank for Rp 638
\nbillion (US$272 million).<\/p>\n
At a separate meeting, approximately 60 percent of Lippo
\nSecurities' minority shareholders endorsed the company's plan to
\npurchase a 27 percent stake in Lippo Life for Rp 243 billion.<\/p>\n
The prices set for the two transactions are below the group's
\ninitial proposals of Rp 658 billion for Lippo Bank and Rp 244
\nbillion for Lippo Life.<\/p>\n
In the two transactions, Lippo Life and Lippo Securities are
\nto pay Rp 100 billion each in cash and issue zero coupon notes
\nfor the remaining costs.<\/p>\n
The three Lippo companies, according to Roy, would be able to
\nexpand their market shares and increase their profits through the
\ndeal.<\/p>\n
\"It's also in line with the group's efforts to gradually
\nreduce its control of its own companies by reducing the share
\nownership of their founders,\" Roy said.<\/p>\n
Roy claimed that reducing a founders' share holding was one
\nway to enlarge a company: \"And it's what Lippo is trying to do.
\nIt's our long term vision.\"<\/p>\n
After the transactions, Lippo Securities will own a 32 percent
\nstake in Lippo Life, while Lippo Life will own a 40.15 percent
\nstake in Lippo Bank.<\/p>\n
The investing public now owns 55.43 percent of Lippo Bank.<\/p>\n
Roy confirmed yesterday that the Riady family would no longer
\ncontrol Lippo Bank after the transactions in which their share
\nholding would be eliminated.<\/p>\n
The Lippo Group's plan was announced almost a month ago and
\nhas received mixed reactions from independent shareholders and
\nstock analysts.<\/p>\n
Some analysts have argued that the Lippo Group would not
\nintend to benefit minority shareholders, while others said the
\nplanned transactions would improve if independent shareholders
\nwere also allowed to sell their shares in the transactions.<\/p>\n
\"Who can guarantee that independent shareholders (of Lippo
\nBank) will sell their positions to meet the management's
\nproposal?\" Roy contended.<\/p>\n
Roy yesterday refuted claims that the Riady family was trying
\nto get Rp 200 billion in fresh money through the two transactions
\nto resolve their financial problems.<\/p>\n
\"I can tell you that the Rp 200 billion in cash will be
\nreinvested in Lippo Securities,\" he said.<\/p>\n
In response to independent shareholders' reactions to the
\nfirst proposal, the Lippo Group sweetened its plan with
\nincentives, including the permanent waiving of a 10 percent
\nmanagement fee on Lippo Bank's pretax earnings, to become
\neffective on Sept. 30.<\/p>\n
Roy said the Riady family would reinvest the proceeds of the
\n15-month zero-coupon notes by subscribing to the rights shares to
\nbe issued by Lippo Securities next year.<\/p>\n
Roy said Lippo Bank would divest its 14 percent share in Lippo
\nSecurities to avoid cross ownership holdings. (alo)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/lippo-groups-restructuring-plan-approved-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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