Bank Mandiri to launch IPO in January 2001

Bank Mandiri to launch IPO in January 2001

JAKARTA (JP): State Bank Mandiri will launch an initial public
offering (IPO) either at the end of this year or in January 2001
to raise about US$1.5 billion, president Robby Djohan said.

Robby said on Tuesday that the IPO proposal would be submitted
to the Ministry of Finance within the next two weeks.

"We have received the green light from the Ministry of
Finance," he told reporters on the sidelines of the bank's
business gathering.

Robby declined to provide details on the IPO plan, which was
originally to have been implemented last October.

Robby said he was optimistic that the market would welcome the
bank's IPO as the country's economic condition was improving,
adding that he was leaving for Tokyo on Wednesday to "test" the
market.

He said Bank Mandiri had become healthy after its
recapitalization program late last year, which increased its
capital adequacy ratio (CAR) to 12.44 percent, much higher than
the minimum 4 percent requirement.

He added that the bank was set to transfer its remaining Rp
16.5 trillion in bad loans or category five loans to the
Indonesian Bank Restructuring Agency (IBRA).

Banks joining the government bank recapitalization program
must transfer all of their bad loans to IBRA to have a clean
balance sheet.

Robby said the category five loans were written off the bank's
balance sheet but had not yet been legally transferred to the
agency.

Bank Mandiri was formed last year out of a merger of four
state banks -- Bank Ekspor Impor Indonesia (Bank Exim), Bank Bumi
Daya (BBD), Bank Dagang Negara (BDN) and Bank Pembangunan
Indonesia (Bapindo).

The government had injected a total of Rp 178 trillion worth
of bonds to recapitalize the bank.

The bank transferred Rp 76 trillion in bad loans to IBRA last
year before the government recapitalized the bank.

According to the existing ruling, a bank can legally transfer
its bad loans if the debtors agree or if the bank is under the
supervision of IBRA. But a bank can be put under IBRA
supervision only if its CAR is below 4 percent.

There appears to be a "technical" problem with the existing
ruling on the transfer of Bank Mandiri's remaining bad loans.

Bank Mandiri managing director Agus Martowardojo said the
country's financial authority could either issue a "intermediary
policy" or revise the existing ruling to facilitate the transfer
of the category five loans.

It is not clear why Bank Mandiri delayed the transfer of its
remaining bad loans. (rei)