Danamon sets rights issue

JAKARTA (JP): Shareholders of nationalized Bank Danamon approved on Tuesday the bank's plan to issue 215.04 million rights shares to raise Rp 32.26 trillion (US$3.7 billion) for recapitalization.

The Indonesian Bank Restructuring Agency, which supervises the bank, announced that the rights shares would be priced at Rp 150 at a par value of Rp 5 apiece.

As the bank has already been nationalized, the government will take the largest portion of the rights issue.

If successful, the bank's capital adequacy ratio -- the ratio between equity capital and risk-weighted assets -- will be boosted to 8 percent.

The bank said it had regained public trust after the bank was taken over by the government in August 1998. The bank's third party funds have improved significantly from Rp 3 trillion in August 1998 to Rp 12.5 trillion at the end of 1998 and Rp 22.6 trillion on March 25, 1999. (rid)