Bank Mandiri plans to raise US$600m via IPO
JAKARTA (JP): Giant state Bank Mandiri plans to raise about US$600 million from its initial public offering (IPO) in October, according to the bank's president E.C.W. Neloe.
Neloe said on Thursday that the bank would sell about 30 percent of its stake in the IPO and would use the proceeds to strengthen its working capital.
"We plan to raise $600 million through the IPO ... the money will be used for working capital. That's our proposal," he told reporters following a meeting with Coordinating Minister for the Economy Rizal Ramli and Minister of Finance Prijadi Praptosuhardjo.
"We also plan a dual listing domestically and overseas," he said, saying the overseas listing would be either on the New York or London stock exchange.
The government earlier said that Bank Mandiri was part of the 16 state-owned enterprises to be privatized this year in a bid to raise Rp 6.5 trillion in proceeds to help finance the 2001 state budget deficit.
Neloe said that the government had not yet decided whether the Bank Mandiri IPO would contribute to the privatization proceeds target.
"The decision is in the hands of the government," he said.
Elsewhere, Neloe said that the lead underwriter of the IPO would be either PT Bahana Securities or PT Danareksa Securities.
He added that several international investment banks had applied to the finance ministry to become the financial advisor for the IPO.
He said the bidders included Deutsche Bank, Lehman Brothers, JP Morgan, Merrill Lynch, ABN Amro, Solomon Smith Barney and CS Boston.
Neloe said that Bank Mandiri posted a net profit of Rp 2.1 trillion ($221 million) last year, while this year's net profit was projected to increase to about Rp 2.5 trillion.
"But we also expect to be able to collect about Rp 3 trillion in past nonperforming loans this year," he added.
He said that outstanding credit last year totaled Rp 47 trillion, with new lending this year expected to reach Rp 7.5 trillion compared to Rp 4.5 trillion last year.
He said that Bank Mandiri's capital adequacy ratio was about 25 percent his year.
He added that the level of nonperforming loans was still at about 20 percent, but the bank planned to cut it down to about 3.5 percent by the end of this year, which is below the government target of 5 percent.
Indofarma
Meanwhile, state-owned PT Indofarma said that it would offer about 906 million existing government shares and 556 million new shares in an IPO scheduled for March 20 through March 22.
Indofarma is one of the state-owned companies to be privatized this year.
The AFX news wire quoted company prospectus as saying that the total number of shares to be offered would represent 47.85 percent of the company's paid-up capital.
The company said the lead underwriters of the IPO would be PT Bahana Securities, PT Bhakti Capital Indonesia and PT Trimegah Securities.
The shares will carry a nominal value of Rp 100, the company said, but gave no indication of the offering price.
It said 53 percent of the IPO proceeds would be used for production capacity expansion and 47 percent for working capital.
In the nine months to September, Indofarma made a net profit of Rp 84.9 billion on sales of Rp 366.4 billion. (rei)