Bank Mandiri to issue $200m bonds in 2004
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.