Bank Bali warrants exceed foreign limit

Bank Bali warrants exceed foreign limit

JAKARTA (JP): Foreign investors will not be able to convert their Bank Bali warrants into shares as long as the bank's foreign portion remains bought out.

"It's something beyond our authority. We have to comply with the regulation which imposes a 49 percent (of total listed shares of a company) ceiling for foreign ownership," said an executive of the bank, Firman Soetjahja.

Firman announced yesterday that with the current stockholder composition, in which foreign ownership has reached 49 percent, any conversion of warrants will exceed the foreign ownership ceiling, thus violating the regulation.

In August 1995, Bank Bali issued 65 million rights shares and 37.2 million detachable warrants to be listed on the Jakarta Stock Exchange.

The bank offered its shareholders the purchase of seven rights for every 20 old shares at Rp 2,000 (86 U.S. cents) each and four warrants to be converted at Rp 2,900.

Bank Bali stated in the prospectus for the rights issue that the shareholders could start to convert their warrants on Feb. 29, 1996.

The warrants will automatically lose value if the shareholders fail to convert them before the expiry date of Feb. 29, 2000.

Bank Bali's senior vice president, Hendri Kurniawan, said that foreign investors should wait until local investors converted their warrants.

"Unfortunately, it's not the right time for local investors to do so because Bank Bali's local prices do not offer gains as much as the foreign prices do," he said.

Bank Bali's local prices closed only Rp 100 above the warrants, priced at Rp 3,000 yesterday. On the contrary, the foreign price closed at Rp 5,600 or 93 percent higher than the warrants price.

"The only thing we can do now is refund shareholders who paid for the conversion," said Hendri. (08)