Govt sells 10% shares in Mandiri

Govt sells 10% shares in Mandiri

Dadan Wijaksana, The Jakarta Post, Jakarta

The government collected on Thursday Rp 2.87 trillion (about
US$330 million) in proceeds from the sale of a 10 percent stake
in Bank Mandiri in the stock market via private placement in
another round of the privatization of the bank.

Mahmuddin Yasin, a deputy to the State Minister for State
Enterprises in charge of privatization, said that the shares were
priced at Rp 1,450 each.

"The offering, which totaled 1.98 billion shares, was 1.5
times oversubscribed," said Mahmuddin.

The share price was lower than Mandiri's Rp 1,500 last quoted
price at the Jakarta Stock Exchange (JSX) on Wednesday, before
the trading was suspended, pending the completion of the
offering.

Earlier, it was reported that the bidding prices had been set
at a range of Rp 1,450 and 1,475 per share. Of the total number
of shares, about half of which were offered to local investors
via Danareksa Sekuritas, while UBS Warburg handled the offering
of the remaining shares to foreign investors.

The sale was in addition to the first one last year, in which
the government successfully sold 20 percent of Mandiri's stake in
what has been dubbed as the most successful share offering ever.

After the Thursday's sale, the government now holds 70 percent
of the bank's stake.

Mandiri is included on the list of state firms to be sold this
year, along with another 14 companies, in order to meet the
government's privatization revenue target of Rp 5 trillion.

The bank was formed in 1998 through a merger of four state
banks; Bank Ekspor Impor Indonesia (Bank Exim), Bank Dagang
Negara (BDN), Bank Bumi Daya (BBD) and Bank Pembangunan Indonesia
(Bapindo).

It now boasts staggering assets of Rp 251 trillion, making it
the largest lender in the country.

Under the privatization program, the government last year
managed to rake in Rp 7.4 trillion in proceeds, surpassing the
initial target of Rp 6.2 trillion.

The proceeds mostly came from the sales of stake in four state
companies: Mandiri (20 percent), Bank Rakyat Indonesia (40.5
percent), cement maker Indocement (16.9 percent) and natural gas
distribution company Perusahaan Gas Negara (39 percent).

The government has been relying on proceeds from the program
to help cover the state budget deficit, which for this year has
been set at Rp 24.4 trillion or 1.2 percent of the country's
gross domestic products (GDP).

The government has said that it planned to sell another 10
percent stake in Mandiri this year, although the House of
Representatives has not yet approved the plan.