BNI divestment, bond issue unlikely this year
BNI divestment, bond issue unlikely this year
The Jakarta Post, Jakarta
State-owned Bank Negara Indonesia (BNI) said it was likely to
delay plans to sell 30 percent of its shares to public investors
and to issue as much as US$300 million in bonds this year, due to
regulatory constraints and unfavorable market conditions.
Head of BNI divestment team Fero Poerbonegoro said the
divestment of BNI shares was not technically possible this year,
following a delay in gaining approval from the House of
Representatives and the need to use the latest financial reports.
"The divestment of BNI shares, along with the bond issue plan,
are likely to be feasible next year," Fero said on Thursday at a
press conference.
Fero explained the bank could no longer use the first-semester
financial report as a base to sell the shares, as according to
capital market regulations, financial reports are valid for only
180 days, while under international law, it is 135 days.
The bank would also need to seek approval from the new
government and legislators, which would take some time, he said.
"We are likely to use a full-year financial report as the base
for the divestment and bond issue. It is the most feasible," he
said.
BNI, the country's third largest bank in terms of assets, will
retain Bahana Securities and JP Morgan to arrange the divestment.
The House decided on Monday to delay approving the BNI
divestment and left the matter to the next government and
legislators. The House also argued the divestment was not urgent,
as BNI still had sufficient capital and because the government
could find ways to plug the state budget deficit without selling
the bank's shares.
The government had planned initially to sell the bank's shares
in November or December via a secondary offering.
Fero also said the bank would reevaluate its plan to issue
subordinated bonds this year, following unfavorable market
conditions that might trigger higher interest on the bonds, which
would create a heavy burden for the bank.
BNI shares ended higher by Rp 25 on Thursday at Rp 1,300 on
the Jakarta Stock Exchange.