Danamon issues debt to acquire Adira

Danamon issues debt to acquire Adira

The Jakarta Post, Jakarta

Bank Danamon announced on Thursday a plan to issue Rp 2.4
trillion (US$285 million) in subordinated debt to raise funds to
purchase majority shares in automotive financing company PT Adira
Dinamika Multi Finance.

In a statement to the Jakarta Stock Exchange, the bank said it
had signed a conditional sales and purchase agreement with Adira
on Jan. 26, but the deal could only be realized after the bank
had received approval from its shareholders and the central bank.

"The strategic plan to purchase a majority stake in Adira is
part of the bank's attempt to become a major player in the
consumer segment," said Danamon president Francis A. Rozario in
the statement.

Danamon, the country's fifth largest bank in terms of assets,
explained that the plan to engage in the financing industry was
driven by the fact that the sector had grown rapidly in the past
few years.

Adira's financing portfolio has grown by 110 percent annually
in the last three years, with lending in 2003 totaling about Rp
3.7 trillion.

Adira, which was established in 1991, is mostly engaged in
financing the purchase of motorcycles. With 105 branches, the
company's business has accounted for 12 percent of the total
market share, which was worth about Rp 78 trillion last year.

Asia Financial Indonesia Pte. Ltd, a consortium of Temasek
Holdings Pte. Ltd. and Deutsche Bank, owns a 61.88 percent stake
in Danamon.

The bank's shares on the local bourse ended Rp 50 lower at Rp
2,300 on Thursday on profit taking.