BRI to sell 36% stake generating at least Rp 2.11 trillion
BRI to sell 36% stake generating at least Rp 2.11 trillion
The Jakarta Post, Jakarta
State-owned Bank Rakyat Indonesia (BRI) officially announced
on Thursday that it would sell 36 percent of its shares, or a
total of 4.23 billion shares, to the public through its upcoming
initial public offering (IPO) later this month.
In its published prospectus, the micro-financing bank said
that its shares would be priced at Rp 500 each (around 6 U.S.
cents), meaning that if the IPO ran smoothly as planned, the
government, as the 100 percent owner of the bank, would rake in
at least Rp 2.11 trillion.
BRI, the country's fourth largest bank, has allocated another
1.05 billion shares, or 9 percent of its equity, for sale to
investors if the demand for its shares is greater than the
supply.
The bank will offer the shares to institutions in the last
week of October, and retail investors in the following week. BRI
is scheduled to list its shares on Nov. 10 on the Jakarta and
Surabaya Stock Exchanges.
BRI has appointed state-owned brokerage house PT Bahana
Sekuritas as the lead underwriter for the IPO.
To encourage investors to buy its shares, BRI is offering a
sweetener in the form of a 50 percent dividend payout based on
its 2003 performance. The dividend will be distributed in 2004.
In the first semester of this year, BRI booked a net profit of
Rp 1.182 trillion, or an increase of 8 percent over last year.
Elsewhere, the bank said in the prospectus that some of the
proceeds from the IPO would be used to strengthen its capital
base.
Earlier, the bank said that without an injection of new
capital, the bank's capital adequacy ratio (CAR) would decline to
around 11.5 percent in 2004 from 14.7 percent at present. CAR is
the ratio between capital and risk-weighted assets like loans.
BRI's CAR has been in decline over the past few months,
reaching 12.36 percent as of the end of June, down from 14.7
percent in March.
BRI focuses on extending loans for micro, small and medium
enterprises. Of Rp 43.6 trillion in outstanding loans as of June
this year, 91.62 percent had been extended to such businesses.
The government needs to sell state assets, including BRI, to
help plug the widening budget deficit, which it is estimated will
reach Rp 35.2 trillion this year.