Bank Lippo acquisition approved
The Jakarta Post, Jakarta
Shareholders of publicly listed PT Bank Lippo have approved the acquisition of more than half of its shares by Khazanah Nasional, a Malaysian government investment holding arm.
They approved the acquisition during an extraordinary meeting on Friday in Jakarta.
Khazanah acquired Swissasia Global (SAG)'s 52.05 percent stake in Bank Lippo for about Rp 3.3 trillion (about US$320 million), or Rp 1,619.11 per share.
The price was slightly higher than the shares' book value. The bank's shares were trading at Rp 1,530 per share on the Jakarta Stock Exchange on Friday.
A Khazanah wholly owned unit, Amsterdam-based Santubong Investments BV, conducted the acquisition, which is expected to be finalized in October.
The shareholders also appointed new commissioners and directors with two Khazanah officials joining the boards.
Jos Luhukay retained his position as president director, while Khazanah senior vice president for investments, Lim Eng Khim, was elected chief executive officer. Citibank director of consumer banking Laurenthis Sulistiawati was chosen as director of consumer banking and Thila Nadason of PriceWaterhouse Coopers Indonesia as chief financial officer.
Khazanah director for investments Abdul Farid Alias and Bank Niaga director for information technology Andi Mohammad Hatta were elected as commissioners.
Jos explained that the finalization of the acquisition would be completed in October after Bank Indonesia (BI) approved the process and the election of new commissioners and directors.
"I'm optimistic that BI will approve the acquisition and the lineup of new commissioners and directors," he said.
The deal comes amid reports of objections from certain parties who cited a clause in the 2004 sale and purchase agreement that SAG, which purchased Lippo's stake in February 2004, could not resell its stake within the next two years, the so-called lock-up period.
Jos rejected suggestions that Khazanah would follow SAG's move in holding the bank's shares for just a short period of time.
"Khazanah is here for the long run. Its presence is expected to accelerate the bank's growth and improve its performance. It has come at the perfect time, just as we are aiming to become a national bank in the next five years," he said, referring to BI's plan to consolidate the number of banks and classify them as international, national and specialist banks in 2010.
Under the plan, a national bank is required to have a capitalization of between Rp 10 trillion and Rp 50 trillion, while according to Bank Lippo's report for the first semester, its capitalization stood at about Rp 2.5 trillion.
Jos also denied that the election of Andi as a commissioner would lead to a merger between Bank Lippo and Bank Niaga.
"It's too early to say that. But Khazanah doesn't have to merge all its companies that are operating in one country. At present, it manages five to six financial institutions in Malaysia," he said.
The issue was raised due to the fact that Khazanah has an indirect stake in Bank Niaga. Data taken from Bank Niaga's website shows that Commerce Asset-Holding Bhd., a 22 percent stake of which is controlled by Khazanah, owns 61.56 percent of the bank. (006)