Govt plans to sell 10% Danamon stake this year

Govt plans to sell 10% Danamon stake this year

Indonesia's government plans to sell a 10 percent stake in PT Bank Danamon, the nation's fifth-largest lender, on the stock market this year to help finance its deficit gap.

The Finance Ministry asked Perusahaan Pengelola Aset (PPA), a government agency in charge of selling state assets, to "prepare the sale" of 10 percent of the lender, it said in a statement.

The stake in Danamon is worth Rp 1.75 trillion (US$191 million) at the current market price.

The government is selling assets, including bank stakes, to raise funds to cover a budget deficit estimated at Rp 26.3 trillion this year.

The deficit reached Rp 25.5 trillion in the first nine months of the year.

Asset sales are also aimed at recouping part of the more than Rp 450 trillion it spent to bail out lenders after the 1997 Asian financial crisis.

Perusahaan Pengelola asked Bank Danamon to suspend trading of its shares with the Jakarta Stock Exchange on Thursday, said Mohammad Syahrial, president director of PT Perusahaan Pengelola, in a faxed statement.

In June, UBS AG was hired to help manage the sale on the stock market of minority stakes in Danamon and three more lenders this year.

The government has a 20.5 percent stake in Danamon, which is 62 percent controlled by Temasek Holdings Pte., the Singapore government's investment company, and Deutsche Bank AG.

The government owns 5 percent of Bank Central Asia (BCA), Indonesia's second-largest lender, 20.8 percent of PT Bank Internasional Indonesia, the No. 6, and 21.5 percent of PT Bank Niaga, the ninth-biggest, according to Bloomberg data. -- Bloomberg