BRI to inject Rp 428b into Bank Inter-Pacific

JAKARTA (JP): Shareholders of publicly listed Bank Inter- Pacific approved on Monday the management's proposal to issue rights shares to strengthen the bank's capital structure.

The bank said it would sell 9.62 billion new shares through a rights issue which would raise Rp 962.5 billion.

The shares, each with a par value of Rp 15, will be sold to existing shareholders at Rp 100 each.

The bank said shareholders would be entitled to buy 154 rights shares for every old share they held at the 154-for-one rights issue.

State Bank Rakyat Indonesia (BRI), the bank's majority owner, will inject at least Rp 428 billion in fresh funds into Inter- Pacific Bank through the rights issue.

The share purchases of BRI, which will act as a standby buyer in the rights issue, could exceed the Rp 428 billion target if other existing shareholders did not exercise all their rights.

"BRI will act as the standby buyer for any shares not bought by other shareholders," an executive if Bank Inter-Pacific said.

Banking analysts are concerned about Inter-Pacific Bank's rights issue plan. They question the capability of the troubled BRI to raise the funds needed to purchase Bank Inter-Pacific's rights shares.

BRI itself needs about Rp 31.6 trillion in government funding for its recapitalization program to improve its negative balance sheets.

"Inter-Pacific Bank's loan portfolio is so bad that injecting more fresh funds into the bank through a rights issue will not help much," an analyst said on the condition of anonymity.

The bank suffered a net loss of Rp 76.8 billion as of June, compared to a net loss of Rp 66.5 billion in the corresponding period last year.

Its total assets, as of June, decreased significantly to Rp 547.1 billion from Rp 2.5 trillion in the same period the previous year.

Its net equity deteriorated as well to minus Rp 826 billion, as compared to positive Rp 37.4 billion last year.

The bank's shareholders are BRI 44.5 percent, Sanwa Bank Ltd. of Japan 25 percent, Credit Commercial De France 15.04 percent and the investing public 15.46 percent.

Bank Inter-Pacific is listed on the Jakarta and Surabaya stock exchanges. (udi)