Bakrie to form consortium to buy Bank Pacific

JAKARTA (JP): Bakrie Group chairman Aburizal Bakrie said he would form a consortium with several local businesspeople to take over the ailing Bank Pacific.

Aburizal said after attending a House Budget Commission hearing that Bank Pacific, after being acquired, would be managed by Bakrie Group affiliate Bank Nusa International.

Aburizal refused to identify the consortium's potential members.

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

But Bank Indonesia (the central bank), which is Bank Pacific's majority shareholder, has not made any decision on Aburizal's offer to help salvage Bank Pacific.

The central bank controls 51 percent of Bank Pacific. The remaining 49 percent is held by the bank's founder, Ibnu Sutowo, former president of state-owned oil firm Pertamina, and his family.

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

The bank's 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 of its Bank Pacific earnings in the property sector, including the Lido resort in West Java which was a disaster.

Bank Indonesia assigned state-owned Bank Negara Indonesia (BNI) 1946 to manage the bank. BNI injected Rp 500 billion into the bank and issued money market securities worth Rp 500 billion which were bought by the central bank.

The central bank has offered the ailing bank to several investors, including Bank Danamon, which has experience in acquiring ailing banks.

Bank Danamon, which entered into negotiations with Bank Indonesia about a possible takeover but is reportedly withdrawing from the takeover battle.

But a Bank Danamon executive said his bank was never interested in acquiring Bank Pacific.

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

Moreover, banking sources said Bank Danamon would not finance its acquisition entirely with fresh funds. It had asked for subsidized liquidity credits of up to Rp 1.8 trillion from Bank Indonesia.

Bank Indonesia director Heru Soepraptomo said last week new investors interested in acquiring Bank Pacific should not ask for liquidity credits from the central bank.

"If we are compelled to give liquidity credits, we will provide a small amount only," Heru said.

Aburizal said the new consortium would finance the takeover itself. (rid)