Govt changes Permata sale plan

Rendi A. Witular, Jakarta

The government plans to allocate a 51 percent stake in Bank Permata to strategic investors in the upcoming divestment process, rejecting a request from several investors who want the government to allocate them up to a 71 percent stake.

State Minister for State Enterprises Laksamana Sukardi said the government chose to allocate 51 percent of its Permata stake to strategic investors in order to raise more money later on the stock market by selling the remaining 20 percent.

"We are going to allocate 51 percent of the stake to strategic investors, and the remaining 20 percent to public investors via the stock market," Laksamana said on Thursday during an exhibition of state-owned companies.

Laksamana said that under this plan the state would gain a higher yield compared to selling the entire 71 percent stake to strategic investors, as the share price of the bank on the stock market was expected to increase after it was acquired by a strategic investor.

The government, which has a 97.17 percent stake in publicly listed Permata, plans to sell 71 percent of its stake later this year to raise cash to help finance the state budget deficit.

According to government-owned asset management company PT Perusahaan Pengelola Aset (PPA), which holds the Permata stake, strategic investors have asked the government to sell the entire 71 percent stake during the strategic sale process, in order for them to gain full control of the bank and put in place their preferred management board.

The PPA has thus far received letter of interests in Permata from about 42 investors, most of them foreign affiliated. The company plans to open the bid on Aug. 13.

Among of the local investors interested in bidding for Permata are Bank Mandiri, Bank Rakyat Indonesia, Bank Panin, Bank Buana, Bank Danamon, Bank Artha Graha and Bank Niaga.

Analysts said earlier that plans by several local banks to participate in the Permata bid was an encouraging sign, but questions remained as to whether local investors could bring the kinds of improvements to Permata that foreign investors had brought to local banks they had purchased in the past year.

Former Bank Indonesia senior deputy governor Anwar Nasution casts doubt over the ability of local banks to improve Permata's performance, urging them not to participate in the bid because of their limited funds and lack of expertise in managing banks.

"Our banks cannot even manage their own operations. Most of them are still relying on income from government recapitalization bonds. So what is so great about them? They do not have enough funds, so let us stop the babbling," Anwar said.