Govt delays Mandiri, BRI sales

Govt delays Mandiri, BRI sales

Bloomberg, Jakarta

The government is delaying the sale of stakes in Bank Mandiri,
the nation's largest bank, and Bank Rakyat Indonesia (BRI)
because it won't get the Rp 5.55 trillion ($545 million) it wants
to raise if it sells now, a minister said.

"If we are forced to sell now the shares may be sold at close
to their book value, which would be a loss to us and the dilution
to the government's ownership would be too big," State
Enterprises Minister Sugiharto said on Saturday evening.

He declined to say when the government plans to sell the
banks.

The government has been selling stakes in banks and other
companies that it acquired after the 1997 Asian financial crisis
to trim its budget deficit, which is forecast to reach Rp 24.9
trillion this year, and recoup part of the more than Rp 450
trillion that it spent bailing out banks after the crisis.

The government wants to raise Rp 2.8 trillion from selling a
10 percent stake in Mandiri and Rp 2.75 trillion from selling a
5.67 percent stake in BRI, the country's fourth-largest lender by
assets, Sugiharto said.

According to Bloomberg calculations, the government wants to
sell the 10 percent Mandiri stake at about Rp 1,390 a share, or
equal to its current market price, and the stake in BRI at about
Rp 4,082 a share, or 70 percent more than its Oct. 21 close price
of Rp 2,400.

"After careful consideration and discussions with our
financial advisers we concluded that the market is currently not
conducive to selling the bank shares now," Sugiharto said.

To meet the government's Rp 3.5 trillion target from asset
sales this year the state enterprises ministry is also exploring
the possibility of having a national infrastructure company,
possibly a telecommunications company, acquire a smaller
infrastructure company.

The government will raise funds from selling a stake at the
smaller infrastructure company to the bigger one, Sugiharto said,
declining to provide details.