Govt raises $65m from Niaga sale
Govt raises $65m from Niaga sale
The Jakarta Post, Jakarta
The government has raised around Rp 585.8 billion (US$65
million) from the sale of a 16.8 percent stake in publicly listed
Bank Niaga on Tuesday.
Ministry of Finance's asset management company PPA said that
the government sold some 1.27 billion shares at Rp 460 per share.
Proceeds from the sale would be used to finance the 2004 state
budget deficit.
Minister of Finance Yusuf Anwar has said that this year's
deficit was expected to widen to 1.5 percent of gross domestic
product compared to the original target of 1.3 percent of GDP
(about Rp 26.5 trillion) mainly due to soaring fuel subsidy costs
as oil prices remain at record levels.
The Niaga sale follows the recent divestment of government's
51 percent stake in Bank Permata and a 10 percent stake in Bank
Danamon. Proceeds from the two sales total Rp 4.51 trillion ($495
million).
The government is now planning to sell another 20 percent
stake in Permata and minority shares in other listed banks such
as Bank Central Asia (BCA), and Bank International Indonesia.
The PPA has been targeted raising about Rp 12.5 trillion in
cash this year to help finance the state budget.
The government owns shares in several listed banks after its
spent billions of dollars worth of bonds to bail banks following
the late 1990s financial crisis. During the past few years, the
government gradually divested its ownership in the banks.
Bank Niaga shares were suspended by the Jakarta Stock Exchange
on Tuesday. Niaga's share price, which has risen by more than 31
percent this year, fell by Rp 10, or 2.3 percent to Rp 460 at the
close of the stock market on Monday.
The divestment of the Niaga shares were managed by UBS AG and
PT Danareksa Sekuritas.
Bank Niaga, the country's ninth largest lender, has forecast
profit to rise to Rp 500 billion this year from Rp 467.3 billion
last year.
Niaga's net income increased to Rp 435 billion in the first
nine months of the year from Rp 330 billion in the year earlier
period. The bank is partly owned by Malaysia's Commerce Asset-
Holding Bhd.