Bakrie, Danamon fight to buy Bank Pacifik

KUALA LUMPUR (JP): The Bakrie Group's Bank Nusa International and the publicly listed Bank Danamon, which the Usman Admadja family controls, are competing to buy the ailing Bank Pacific.

Bakrie Group chairman Aburizal Bakrie confirmed here yesterday that Bank Nusa would probably be merged with the Bank Pacific subject to the approval of Bank Indonesia, the central bank.

"Yes, we are interested. But it depends on Bank Indonesia. If they agree, we are ready," Aburizal said.

He said his company had told the central bank of its intention to merge Bank Nusa with Bank Pacific. The central bank is Bank Pacific's majority shareholder.

Bank Nusa had received a commitment from several investors, including President Soeharto's daughter Siti Hediati, to provide finance to support Bank Pacific, he said.

Meanwhile Bank Danamon, the country's second largest private bank is reportedly negotiating with the central bank about a possible takeover.

The central bank owns 51 percent of Bank Pacific and the bank's founder Ibnu Sutowo, a former president state oil company Pertamina, owns the remaining 49 percent.

Bank Pacific was on the brink of collapse in late 1995 because of bad loans and the central bank bailed it out.

The bank's current bad loans are estimated at Rp 2.1 trillion (US$876 million). At the end of 1995 its total assets were estimated at Rp 2.2 trillion.

Most of the bad debts were incurred by PT Pacific International Finance, a company owned by Endang Utari Mokodompit -- the bank's former president and Ibnu Sutowo's daughter.

Pacific International reportedly used most its Bank Pacific earnings in the property sector, including the Lido resort in West Java, which turned into a sour business.

To help salvage the bank, Bank Indonesia assigned state-owned Bank Negara Indonesia (BNI) 1946 to manage it. BNI injected Rp 500 billion on the bank. BNI then issued money market securities worth Rp 500 billion which the central bank bought out.

Aburizal said if Bank Nusa managed to merge with Bank Pacific, the Bakrie Group's share in the merged bank would shrink to 25 percent.

"It's all right, if we lose some of our control," Aburizal said.

Reliable sources said central bank Governor J. Soedradjad Djiwandono had not yet approved Bank Nusa's offer although several reliable investors supported the bid.

Several parties, including a senior minister, have frowned upon the possibility of Bank Danamon buying Bank Pacific because it would further strengthen certain groups' domination of in the financial sector.

Banking sources said Bank Danamon would not finance its acquisition entirely with fresh funds.

Bank Danamon has bought several ailing banks making it the second largest private bank in asset terms.

It owns the former Bank Sampoerna, which it renamed Bank Delta, and the former Bank Continental, renamed as Bank Dana Asia. (rid)