Bank Lippo to raise share capital by 2,000 percent

JAKARTA (JP): Publicly listed Bank Lippo of the widely diversified Lippo Group announced on Wednesday a planned 2,000 percent increase in its share capital to 17.99 billion shares through the issuance of new shares with a par value of Rp 10 each.

The bank announced that the significant increase in its share capital reflected its confidence and long-term commitment in the country's banking sector.

Managing Director Hanafi Komala said in the statement that the new scheme of Rp 10 par value share was the first of its kind in the Indonesian stock market.

He said that based on the bank's cum-rights closing price of Rp 600 on Wednesday and new shares issued at between Rp 275 and Rp 325, Bank Lippo shares should trade on a theoretical ex-rights price of between Rp 290 and Rp 338.

"Any price over and above this range therefore constitutes a gain and benefit to shareholders," he said.

He said the bank would seek formal approval for the issuance of the new shares at an extraordinary shareholders meeting on Dec. 23 this year.

Bank Lippo, established in 1948, is a private commercial bank offering retail, commercial, international and investment banking services.

The bank, which employs 6,961 staff nationwide, has 364 branches and 260 automated teller machine (ATMs) in 44 cities and towns throughout the country.

Listed on the Jakarta Stock exchange, Bank Lippo has conservative and prudent banking practices focussing on services to customers and has limited U.S. dollar loans.

"The bank does not focus on wholesale, project and syndication loans," Hanafi said. (aly)