BI approves Niaga divestment plan

BI approves Niaga divestment plan

Bank Indonesia on Wednesday approved the sale of a 51 percent stake in Bank Niaga to Malaysia's Commerce Asset Holding Bhd. for around US$120 million.

"Bank Indonesia considers that Commerce Asset Holding is qualified to buy Niaga stake," Maman Sumantri, a deputy governor at the central bank, told reporters.

The central bank's approval makes it likely the deal will now go through.

Some members of the House of Representatives have tried to block the completion of the sale since the Indonesian Bank Restructuring Agency (IBRA) reached an agreement with Commerce Asset Holding last month. Legislators claimed the price for the sale was too low compared with market prices.

But the House's financial committee has given its approval to the deal. The House has a powerful but ill-defined role in Indonesia's new democracy.

Commerce Asset Holding, one of Malaysia's largest banks, bid Rp 1.057 trillion for the stake, which translates to Rp 26.5 a share. -- Dow Jones