Bank Bali to decide rights issue plan this month

JAKARTA (JP): Publicly listed Bank Bali expects to hold an extraordinary meeting later this month to approve its rights issue plan.

The Indonesian Bank Restructuring Agency (IBRA) said on Thursday that the agency was still waiting for approval from the Capital Market Supervisory Agency (Bapepam) to proceed with its limited public offering.

Jerry Ng, the agency's deputy chairman, said that all shareholders would be allowed to use preemptive rights to buy the rights shares, which would be issued to finance the bank's recapitalization cost.

"In the forthcoming rights issue, preemptive rights are open to all parties who meet Bapepam's requirements. The government through IBRA, acts only as standby buyer," Jerry said.

The bank was taken over by the IBRA in July last year after shareholders failed to raise the bank's capital adequacy ratio (CAR) to the minimum level of four percent.

The recapitalization cost of Bank Bali has increased to Rp 4.6 trillion.

Jerry attributed the increase in the recapitalization cost to the sharp drop in the bank's assets quality. "The second reason is due to a projected loss, for the period of February - April 2000, of approximately Rp 200 billion," he said.

The rights issue plan, initially scheduled for October, last year, has been delayed several times following the high-profile scandal surrounding the channeling of funds out of Bank Bali for political purposes, and the withdrawal of would-be investor Standard Chartered Bank.

SCB was allowed to buy a 20 percent stake in Bank Bali from the government after the rights issue but decided to withdraw its bid due to opposition from the bank's employees.

Bapepam also refused to approve Bank Bali's rights issue plan due to inadequate disclosure of information related to owners of shares held by foreign institutions.

Bapepam contended that Bank Bali and IBRA failed to provide necessary details about the owners of about 40 percent of the bank's shares currently held at Deutsche Boerse Clearing AG (DBC) of Germany.

Bapepam chairman Herwidyatmo said early this week that the rights issue could go ahead even without the disclosure of the owners of the bank's shares kept by the German company.

"But undisclosed owners will have no voting rights during the planned shareholders meeting," he added. (udi/hen)