Government raises Rp 1.16t from Bank Permata divestment

Government raises Rp 1.16t from Bank Permata divestment

The Jakarta Post, Jakarta

The government on Tuesday sold another 20 percent stake in
publicly listed Bank Permata, the country's seventh largest bank,
raising around Rp 1.16 trillion (about US$128 million).

The proceeds will be used to help finance this year's state
budget deficit, announced the Ministry of Finance's asset
management company PPA, which conducted the divestment program.

Investors demanded 1.77 times the 1.54 billion shares offered
by the government, PPA said in a statement.

The government sold the Permata shares for Rp 750 each, higher
than the Rp 703 price paid by a consortium of Standard Chartered
Bank and PT Astra International when it bought a 51 percent stake
in the bank last month.

Stanchart is a U.K.-based bank which makes two thirds of its
profits from its Asian operations, while Astra is the country's
largest automotive group that has been seeking a financial
vehicle to help boost its automotive sales.

PPA president Mohammad Syahrial said the consortium had
increased its ownership in Permata to 62.2 percent.

"The consortium bought an additional 11.2 percent stake in
Bank Permata," he said.

The selling price of the Permata shares, however, was lower
than the bank's share price of Rp 1,175 at the close Monday on
the Jakarta Stock Exchange. The bourse suspended trading in
Permata shares on Tuesday due to the divestment program.

The government is scrambling to raise more money to help
finance the state budget deficit, which is estimated to widen to
1.5 percent of gross domestic product (GDP) from the initial
projection of 1.3 percent of GDP, or about Rp 26.3 trillion. The
higher deficit is mainly due to higher than expected expenditures
on fuel subsidies.

Earlier this month, the government sold a 16.28 percent stake
in publicly listed Bank Niaga to investors for Rp 585.8 billion.
Niaga is 52.8 percent controlled by Commerce Asset-Holding Bhd.,
Malaysia's second-largest lender.

Minister of Finance Yusuf Anwar has said that the government
intended to sell its remaining minority ownerships in other
listed banks.