Bank Mandiri to issue $200m bonds in 2004
Dadan Wijaksana, The Jakarta Post, Jakarta
State-owned Bank Mandiri, the country's largest bank, plans to issue about US$200 million worth of international bonds this year to help repay debts and finance its business development programs.
Mandiri president E.C.W. Nelloe announced the issue on Wednesday but said the details were still being formulated.
"We're planning that (bond issue) for this year. We'll need about $200 million this year for business development and debt repayments.
Nelloe spoke to reporters before a hearing with the House of Representatives Commission IX, which would discuss the bank's business plans.
Throughout 2004, Mandiri would have to repay some $500 million in maturing debts, Nelloe said. The bond issue will be the bank's second move, having issued $350 million in international bonds for the first time last year.
Mandiri -- formed in 1998 through a merger of four state-owned banks: Bank Ekspor Impor Indonesia (Bank Exim), Bank Dagang Negara (BDN), Bank Bumi Daya (BBD) and Bank Pembangunan Indonesia (Bapindo) -- now boasts staggering assets of Rp 251 trillion (US$29.88 billion).
Nelloe said the bank would not request that part of the proceeds were raised from its second offering on the stock market because Mandiri's capital ratio had been in a good shape.
As of September last year, the bank's capital adequacy ratio (CAR) stood at 27 percent, far above Bank Indonesia's minimum requirement of 8 percent.
"We still have a sound CAR. We've never requested an increase in our capital in the first place. If the government is planning further divestment, that's for them to decide," he said.
CAR measures a ratio between a bank's capital and its risk- weighted assets.
After having successfully sold 20 percent stake in Mandiri last year via an initial public offering (IPO), the government is now preparing to sell another 10 percent stake through a secondary offering, in a process expected to be completed later this year.
The second sale is complementary to the first as the House voted earlier to sell up to 30 percent of its Mandiri stake.
Turning to the bank's medium-term plans, Nelloe said Mandiri was considering a merger and/or acquisition. This would enable the bank to become a domestic powerhouse during the next three years, before it eventually entered the regional market.
Asked whether the plan included participating in the planned sale of Bank Negara Indonesia (BNI), another heavyweight in the banking sector, Nelloe gave no definite answers.
"Basically, it could be any bank. We haven't thought about BNI as yet, but it's one of the possibilities," replied Nelloe.
The government plans to sell a majority stake in BNI, also in the first half of the year, as part of its privatization drive.