Wed, 23 Aug 2000

Bank Bali to launch rights issue soon

JAKARTA (JP): Publicly listed Bank Bali plans to launch its rights issue in late September to help raise Rp 5.3 trillion (US$646 million) in recapitalization funds, the bank said on Tuesday.

Budi Purwanto, a member of Bank Bali's management team, said that the bank would sell 66.5 billion new shares to existing shareholders during the limited public offering.

"The shares, with a nominal value of Rp 5, will be sold at Rp 80.51 each during the offering period between Sept. 20 and Sept. 26," he said at the company's public presentation.

He said existing shareholders were entitled to buy 99 rights shares for every share they already hold in the 99-for-one rights issue.

The Indonesian Bank Restructuring Agency (IBRA) will act as the standby buyer in the rights issue on behalf of the government.

Bank Bali expected the government to inject bonds of up to Rp 5.3 trillion some time in October for any unsold shares.

Bank Bali, one of several banks joining the government- sponsored recapitalization program, expects the rights issue to help raise its Capital Adequacy Ratio (CAR) to 12.81 percent from minus 167.64 percent at present.

Like other banks, Bank Bali suffered massive losses due to a huge negative spread, a condition where the interest payment was much higher than the interest earning.

The bank, which suffered a net loss of Rp 2.58 trillion in 1998 and Rp 2.02 trillion in 1999, showed a slight improvement in the first semester of this year. But the bank's net loss was still high at Rp 623.33 billion during the January-June period.

Bank Bali estimated the losses would decline to Rp 1.1 trillion this year, and it would book gross profits of Rp 655 million by 2001 and Rp 154.5 billion by 2002.

Bank Bali's financial report as of June 30, shows total assets of Rp 5.1 trillion .

The bank, with 285 branches and 5,000 employees, was one of the country's best performing banks before the economic crisis began in 1997.

Bank Bali is 50.2 percent owned by the German-based investment firm Deutsche Clearing Bourse AG, (DBC), 13.93 percent by PT Sarijaya Wirasentosa, which is owned by the bank's former president Rudy Ramli, and 8.29 percent by PT Sanwa Bank Ltd. The public owns the remaining shares.

Budi said that the rights issue would cause a 99 percent dilution of the shareholders' ownership if they do not exercise their rights.

IBRA has said that the Capital Market Supervisory Agency (Bapepam) would freeze the voting rights of the owners of the shares, which are kept at DBC, during the upcoming rights issue if they refused to reveal their names.

The move would cause DBC's stake in Bank Bali to dilute from 50 percent down to 0.5 percent. (bkm)