Bumiputera to complete stake sale next month

Urip Hudiono, The Jakarta Post, Jakarta

The sale of a majority 58.41 percent stake in Bank Bumiputera is expected to be completed in May, according to a senior officer of the mid-sized bank.

"According to the divestment plan schedule, our new investor will hopefully be determined in May," marketing director Toto Moeljono said on Tuesday on the sidelines of a launching ceremony for the company's latest customer appreciation program.

Toto explained that there were three investors interested in acquiring the bank. They include Bank Panin, insurance company AJB Bumiputera 1912 and Malaysian financial holding group International Commercial Bank (ICB).

The majority stake on offer consists of shares owned by three subsidiary companies of state-owned investment firm PT Danareksa: PT Reksasentosa Dinamika, PT Reksatama Dinamika and PT Cipta Usaha Citra Dana.

Toto further said that Bank Bumiputera would also press ahead with its two principal strategic plans for this year: the issuing of asset-backed securities worth Rp 1 trillion (US$117.65 million) and of subordinated bonds worth Rp 200 billion.

The asset-backed securities, he explained, were expected to raise cash to support the bank's lending operations, while proceeds from the bonds would increase the bank's capital adequacy ratio to 12 percent from the current 9 percent.

"The plans will hopefully start to be rolled out in June as scheduled," he said.

Toto, however, said that even though the plans had been approved by the bank's shareholders meeting earlier this year, the bank would still have to heed the views of its new majority investor.

"If our new investor requests another meeting to discuss and approve the plans once again, then we will hold such a meeting," he said.

Asset-backed securities are bonds that are based on an underlying pool of assets. A special purpose trust or instrument is set up and takes title to the assets, while cash flows are passed through to investors. The type of assets that can be used under such schemes range from residential mortgages to credit card receivables.

It is a relatively new kind of debt instrument in Indonesia. In fact, Bank Bumiputera will be the first bank to launch such securities here.