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.