Wed, 05 Jan 2000

Bank PDFCI delisted following merger

JAKARTA (JP): Bank PDFCI was delisted from the Jakarta Stock Exchange (JSX) here on Tuesday following the finalization of its merger with Bank Danamon.

"The merger of Bank Danamon and Bank PDFCI has received the approval of the minister of justice," the JSX said in a statement made available to The Jakarta Post.

The statement said the trading of Bank PDFCI shares was halted the day of its delisting on Jan. 4, but the shares could be traded as Danamon shares until Jan. 11.

On Jan. 11, Bank PDFCI shares can be converted into Bank Danamon shares, at two Danamon shares for every PDFCI share.

As a result, Bank Danamon will have to issue 45.37 billion new shares, or twice as many shares of Bank PDFCI prior to the merger, JSX said.

Bank PDFCI shares were at Rp 350 while Bank Danamon was at Rp 225 prior to the merger, with outstanding share volume in the market of 22.7 billion and 217.3 billion, respectively.

According to the JSX, the share price of Bank Danamon following the merger will be set at Rp 225. This figure is the weighted average of the share prices of the two banks before the merger.

The total combined volume of Bank Danamon shares after the merger will be 262.6 billion shares, JSX said.

The merger of Bank PDFCI and Bank Danamon was initially part of the government planned merger of nine banks which was to take place later this year. These nine banks were Bank PDFCI, Bank Duta, Bank Nusa Nasional, Bank Pos Nusantara, Bank Rama, Bank Tamara, Bank Tiara Asia and Jaya Bank Internasional.

But sources said if these nine banks had merged, the resulting bank would not have met the required minimum 4 percent capital adequacy ratio (CAR).

"Merging Bank Danamon with PDCI would result in a CAR level of above 10 percent," the source said.

Bank Danamon and Bank PDFCI are two of a number of banks nationalized by the government because of their deteriorating financial performance triggered by increasing numbers of bad loans.

Following the nationalization of Bank Danamon, its senior executives were replaced by top people from Bank PDFCI.

Bank PDFCI was nationalized by the government after it almost collapsed in 1998 in the wake of the economic crisis. (udi)