Bank Servitia expects Rp 4b in fresh funds

JAKARTA (JP): Bank Umum Servitia expects to raise at least Rp 40 billion (US$17 million) from its initial public offering (IPO) in October, says the bank's top executive.

David Nusa Wijaya, the bank's president, said yesterday that proceeds from the planned IPO would be used to strengthen the bank's capital structure.

"We have to increase our capital to meet Bank Indonesia's new capital requirements," he said after signing an agreement for a US$12 million syndicated being provided by his bank.

The country's foreign exchange banks, including Bank Umum Servitia, are required to increase their paid-up capital to at least Rp 50 billion by September 1997, to Rp 100 billion by September 1999 and to Rp 150 billion by September 2001. Their capital adequacy ratio (CAR) must reach a minimum level of 8 percent by September 1997, 10 percent by September 1999 and 12 percent by September 2001.

Bank Servitia, which is currently controlled by David's family, initially planned to float 40 million shares, or around 20 percent of its enlarged shares, next month but delayed the plan due to unfavorable market conditions.

"We hope the market will be more promising in October," David said, adding that state-owned Bank Negara Indonesia's IPO, which is also scheduled for later this year, is unlikely to affect his bank's public offering. "Our IPO will be launched a month ahead of BNI's, so I don't think there will be much competition from the state-owned bank," he added.

Many companies were reported to have delayed their IPOs to avoid head-to-head competition with BNI's public offering, which will be the largest IPO of the year.

Bank Umum Servitia booked total assets of Rp 1.04 trillion as of June this year, with total lending reaching Rp 824.79 billion and deposits Rp 801.21 billion.

The bank's pretax profit totaled Rp 9.8 billion in the January-June period.

David said that the $12-million syndicated loan facility was arranged for PT Plasindo Lestari, a packaging company based in Kerawang, West Java.

He said that the lead underwriter of the syndicated loan, which carries an interest rate of around 10 percent per annum, is Hong Kong-based Bank Bumi Daya Internasional Finance Ltd.(hen)