Govt shortlists five advisors for Permata

The Jakarta Post, Jakarta

The government is pressing ahead with its plans to auction off a majority stake in Bank Permata, with five securities firms shortlisted as candidates for the program's financial advisors.

Mohammad Syahrial, president of the Asset Management Company (PPA) -- a state agency in charge of assets formerly controlled by the Indonesian Bank Restructuring Agency (IBRA), said that the five had been picked from a total of 19 firms taking part in the selection process.

"We're running a 'beauty contest' to select the financial advisor for the (divestment) program. We plan to decide the winner tomorrow (Friday)," Syahrial said on Thursday.

Syahrial said the five were prominent players in the industry, namely Morgan Stanley, ABN Amro, UBS Warburg, Merryl Lynch and Credit Suisse First Boston.

Permata, which is 97 percent owned by the PPA as the government's representative, is included in the government's list of banks to be sold this year, although the plan remains subject to approval from legislators.

The PPA's continued commitment toward divestment should pose another blow to Bank Negara Indonesia (BNI)'s plans for a merger with Permata. Under PPA's plan, the sale of the Permata stake will be on an open auction, meaning both domestic and foreign investors can participate in the sale program.

BNI said that the merger with Permata that has different core businesses would form a win-win partnership. BNI's proposal, however, suffered a setback on Wednesday when Permata's management expressed opposition to the plan, although the government will have the final say as the bank's majority stakeholder.

The management said Permata would instead focus on efforts to strengthen its business operation to improve its value ahead of the sale program. The bank is one of the country's leading lenders for the retail and consumer sectors.

Permata itself emerged from a merger of five banks controlled by the now-defunct IBRA -- Bank Bali, Bank Universal, Bank Arthamedia, Bank Prima Express and Bank Patriot -- to become one of the country's top-10 lenders with assets of some Rp 30 trillion.

Elsewhere, Syahrial said, in addition to selecting a financial advisor for the divestment plan, PPA was also in the process of selecting a legal advisor for the plan.

"For the legal advisor, we had sent 13 teaser letter to 13 legal firms. Nine of them have expressed interest. We have shortlisted them to three," he said, without naming them.