Wed, 19 Mar 2003

Government says Bank Mandiri IPO plan on track

A'an Suryana, The Jakarta Post, Jakarta

The government said on Tuesday that the initial public offering (IPO) for giant, state-owned Bank Mandiri was expected to take place in the middle of this year as planned.

Deputy assistant at the Office of the State Minister for State Enterprises Mahmuddin Yasin said that two government decrees, which would provide the legal basis for the IPO, would be completed soon.

"The decrees (one on the bank's capital structure and another on the divestment procedures), will be completed by the end of March," he told reporters on the sidelines of a discussion on the privatization program.

Legislators had previously called on the government to temporarily cancel all existing privatization programs pending the enactment of a special law on state-owned enterprises (SOEs) which would also cover privatization procedures.

It is still not clear when the House of Representatives might see its way to approving the proposed bill on SOEs.

Bank Mandiri is on the list of SOEs to be privatized this year in a bid to raise around Rp 8 trillion (about US$900 million) to help finance the state budget deficit.

The government has yet to decide on the size of the Bank Mandiri IPO, but earlier reports said that the government was planning to sell a 30 percent stake in the bank.

The privatization of Bank Mandiri has actually been canceled several times for various reasons, including unfavorable financial market conditions and strong resistance from lawmakers.