Govt set to sell 20% stake in Mandiri

Govt set to sell 20% stake in Mandiri

Dadan Wijaksana, The Jakarta Post, Jakarta

The government hopes to sell 20 percent of the shares in giant
state-owned Bank Mandiri this year through a private placement,
according to a senior official.

Deputy at the Office of the State Minister of State
Enterprises Mahmuddin Yasin said on Monday that the ministry
would soon seek approval from the House of Representatives.

The House previously allowed the government to sell a 30
percent share in Bank Mandiri. The government last year sold a
20 percent stake through an initial public offering (IPO),
meaning that the government can still sell a further 10 percent.

"The House has already agreed to sell the 10 percent stake in
the bank, now we're trying to get the approval for another 10
percent," Mahmuddin told reporters.

He said that the government wanted to sell more shares in a
bid to raise more money.

The government is hoping to pull in around Rp 5 trillion in
privatization proceeds this year. It remains unclear however,
whether the privatization proceeds target will be revised upward
because of the change in the sale of the Bank Mandiri shares.

The government is relying on proceeds from the privatization
to help cover the state budget deficit, which is Rp 24.4
trillion, or 1.2 percent of the country's gross domestic products
(GDP).

However, Mahmuddin reiterated that his office remained
committed to the completion of all the 2004 privatization
programs within the first semesters of this year, in order to
avoid distractions arising from the general elections -- during
which investors are expected to take a wait-and-see stance.

The government has said it planned to sell shares in 14 state-
owned companies this year.

Bank Mandiri was formed in 1998 through a merger of four state
owned 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, and it is
the largest lender in the country.

In 2003, the government managed to raise Rp 7.4 trillion in
privatization proceeds, surpassing the initial target of Rp 6.2
trillion.

The proceeds mostly came from the sales of stakes 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).