Govt may sell entire stake in Permata

Govt may sell entire stake in Permata

Rendi A. Witular, Jakarta

The government plans to sell its entire stake in Bank Permata,
the country's seventh largest bank in terms of assets, to
strategic investors this year in a bid to obtain maximum proceeds
from the divestment.

President director of PT Perusahaan Pengelolaan Aset (PPA)
Mohammad Syahrial said the plan to unload the government's entire
stake in Bank Permata was one of three options proposed to the
House of Representatives for approval.

"We want maximum proceeds from the sale. Selling the stake in
its entirety at one time to strategic investors will enable us to
get the highest possible price for the shares," Syahrial said on
Thursday after a meeting with House Commission IX for financial
affairs.

The government has a 97.17 percent stake in the publicly
listed Permata, which is managed by the PPA, an entity under the
Ministry of Finance.

The government earlier said it would only sell 71 percent of
its stake in the bank this year, broken down into 51 percent to
be offered to strategic investors and 20 percent to public
investors.

Syahrial said the other two options were to sell 51 percent of
the stake to strategic investors and 46.17 to public investors,
or to sell 71 percent of the stake to strategic investors and
26.17 percent to the public.

However, the selling price in these divestment options would
be lower than that of the first option, and the divestment
process would be longer and more complex, he said.

Commission IX chairman Emir Moeis said the government would
invite Minister of Finance Boediono and State Minister of State
Enterprises Laksamana Sukardi to elaborate upon the divestment
plans, so that the Commission could select one of the options.

Elsewhere, Syahrial said the Permata shares could be worth
more than 1.8 times its book value.

"Bank NISP and Bank Buana have sold a part of their shares to
foreign investors at more than double its book value. We expect
Permata, which is larger than those two banks, will follow suit,"
he said.

The government has hired ABN Amro Holdings NV to help arrange
the stake sale later this year, and 19 investors -- 12 foreign
and seven domestic -- have expressed their interest in bidding
for Permata.

Syahrial acknowledged the PPA had received a recommendation
from the House to prioritize local investors in order to create
healthy competition in the banking industry.

"We will not limit foreign-based investors during the tender.
This is an open tender, (so) anyone can join in. But we will
prioritize local investors," he said, suggesting that local
investors should form a consortium with foreign financial
institutions in order to raise sufficient capital to participate
in the tender.

The government is planning domestic and international
road shows in the latter half of July to promote the Permata
tender. The winning bidder will be announced in the fourth week
of October.

Permata shares ended unchanged on Thursday at Rp 675 on the
Jakarta Stock Exchange.

Permata's financial performance (in Rp billions)

2002 2003 2004 (Q1)

Assets 28,028 29,035 29,769

Capital 1,157 1,714 1,841

Net interest revenue 357 1,096 372

Net profit (losses) (808) 558 127

Indicators (%)

Non-performing loans (NPL) 27.20 11.20 8.34

Capital adequacy ratio (CAR) 10.40 10.80 12.84

Source: Bank Permata