Govt hopeful Permata sold off by end of December

Govt hopeful Permata sold off by end of December

The Jakarta Post, Jakarta

The government said on Monday it would meet investors starting
next week to gauge sentiment towards Bank Permata, which it plans
to have sold off by the third week of December.

The meetings were planned in major business cities including
Singapore, Hong Kong, Kuala Lumpur and London, Asset Management
Company (PPA) vice chairman Raden Pardede said.

The PPA is a state agency set up to handle the restructuring
and sales of state assets formerly managed by the Indonesian Bank
Restructuring Agency (IBRA).

The agency currently owns 97 percent of the country's seventh
largest lender and has gained an approval from the House of
Representatives to sell up to 71 percent of the stake this year,
with the remaining stake likely to be sold next year.

The Permata sale is part of the government's efforts to
generate revenue to help cover the state budget deficit, which is
this year estimated to reach Rp 24.5 trillion.

At the current price of Rp 950 per share, which according to
analysts is more than four times its book value, a 71 percent
stake of Permata would be worth about Rp 5.7 trillion. The bank
emerged from a merger process of five banks controlled by the
now-defunct IBRA -- Bank Bali, Bank Universal, Bank Arthamedia,
Bank Prima Express and Bank Patriot.

The sale plan has drawn the interest of many domestic and
foreign investors.

Local institutions such as Bank Central Asia, Bank Mandiri,
Bank Danamon, Bank Panin and Bank Artha Graha have reportedly
shown interest, while foreign banks such as Singapore-based
Temasek and UK-based Standard Chartered Bank also apparently
eying Permata.

And more bidders are on the way, with Bank Buana director
Pardy Kendy saying on Monday that Buana was considering entering
the bidding through a consortium, which would likely include the
Singapore-based United Overseas Bank (UOB).

Buana, Indonesia's 11th largest bank in terms of assets, is 23
percent owned by UOB.

"We are interested in Permata as it would help us increase our
business growth. We are currently in the process of studying the
possibility of joining the bid," Pardy told The Jakarta Post.

The bank had to form a consortium for its bid because under
existing regulations, local banks are not allowed to spend more
than 10 percent of their net equity for acquisitions -- a move
aimed a keeping banks' capital adequacy ratios healthy.

Buana is one of the few banks that has managed to survive the
crisis without a government bailout. As of last year, its assets
reached Rp 14.3 trillion with a net income of Rp 221 billion. The
return on equity and assets stood at 17.0 percent and 2.3
percent, respectively.

Meanwhile, the government said on Monday it was unlikely it
would complete the sale of two state banks, Bank Mandiri and Bank
Negara Indonesia (BNI), this year as initially planned.

Mahmuddin Yassin, an official in charge of asset privatization
under State Minister for State Enterprises Laksamana Sukardi,
said the government would probably postpone the sale of the two
banks until next year as the House was still withholding its
consent for the process.

Yassin said the likely postponement could hamper the
government's ability to plug the budget deficit.