BCA drops Permata plan, Danamon to seek approval

BCA drops Permata plan, Danamon to seek approval

Rendi A. Witular, Jakarta

Publicly listed Bank Central Asia (BCA), the country's second
largest bank in terms of assets, has canceled plans to join
bidding for a controlling stake in Bank Permata, a senior
official said.

BCA finance director Jahja Setiaatmadja said the bank's board
of commissioners and a number of shareholders had rejected the
plan because the bank could not play a deciding role in the
planned financial consortium set up for the Permata bid.

"The board of commissioners rejected our plan because they
considered it unfeasible and not strategic, since our part in the
consortium would be small," Jahja told The Jakarta Post in a
telephone interview on Tuesday.

"We needed to play a greater role in the consortium in order
to have full control over Permata's operations. But as you known,
central bank regulations limit us from doing that," he said.

BCA, which is controlled by U.S-based Farralon Capital and
local cigarette producer PT Djarum, needed to form a consortium
to be able to participate in the Permata tender, since banking
regulations limit the size of a bank's investment in a single
entity to no more than 10 percent of its net equity.

As of the first quarter of this year, BCA had an equity of Rp
13.46 trillion (US$1.5 billion) and assets valued at Rp 136.2
trillion.

Shares of BCA ended unchanged at Rp 1,875 on the Jakarta Stock
Exchange (JSX) on Tuesday.

The government, which has a 97.17 percent stake in publicly
listed Permata, plans to sell 71 percent of its stake later this
year to raise cash to help finance the state budget deficit.

The government, which is expected to reap around Rp 3 trillion
from the Permata sale, has extended its schedule to announce the
winner of the bid to December from November, due to the
elections.

Elsewhere, publicly listed Bank Danamon, the country's fifth
largest bank in terms of assets, said that it was still seeking
approval from its board of commissioners in order to participate
in the Permata tender.

Danamon president director Francis Andrew Rozario said the
bank was in the final stage of evaluating the advantages and
disadvantages of acquiring Permata.

"We haven't really approached anyone yet to form a consortium
for the bid, since we are still finalizing the plan. We expect
approval from the commissioners in the middle of August," said
Rozario before a press conference on Tuesday.

Rozario said that Danamon would only contribute a maximum of
25 percent to the consortium due to the limitation stated in
banking regulations.

Asia Financial Indonesia Pte. Ltd (AFI), a consortium of
Singapore's Temasek Holdings Pte. Ltd. and Germany's Deutsche
Bank, is the controller of Danamon.

Danamon shares ended lower by Rp 50 to Rp 3,325 on the JSX on
Tuesday.