CAHB completes payment for Niaga

CAHB completes payment for Niaga

The Jakarta Post, Jakarta

Malaysian financial firm Commerce Asset-Holding Bhd. (CAHB)
said it had deposited the full Rp 1.01 trillion (about US$114
million) payment to the Indonesian Bank Restructuring Agency
(IBRA) account to close the Bank Niaga divestment deal.

"The closing of the Niaga divestment deal will allow us to
focus on developing the bank by capturing a share of the consumer
finance and commercial business," CAHB director Rozali bin
Mohammed Ali said in a press release.

The payment, which was made through Citibank, followed the
signing of a sale and purchase agreement between IBRA and CAHB
for Niaga's 51 percent stake two weeks ago.

In addition to the payment, CAHB also submitted to IBRA
nominees for Niaga's commissioner and director positions,
although the lists were kept private.

All the names will be made public once Niaga's extraordinary
shareholders' meeting, scheduled for next Monday, was completed,
the statement said.

Previously, IBRA and Commerce had agreed to a four-three
composition of board directors in Niaga, with Commerce taking
four seats while IBRA would take three.

The deal has effectively reduced IBRA's ownership in the bank
to 46 percent from 97 percent.

While Commerce is the second largest banking group in Malaysia
with a market capitalization of over $2.2 billion and total group
assets of almost $21 billion, Niaga is Indonesia's ninth largest
bank with assets of over $2.7 billion as of June 30 of this year.

Bank Niaga marks the second sale to a foreign investor of a
bank taken over by IBRA, following the sale of a 51 percent stake
in Bank Central Asia (BCA) to an American investment firm last
March.

Both deals followed lengthy public debates over the benefit of
selling nationalized banks after the government, through IBRA,
bailed out scores of banks with billions of dollar in state bonds
during the 1997 economic crisis.

The government earned some Rp 5 trillion from selling BCA but
must still pay the bank around Rp 7 trillion a year because of
the bonds.