Govt to increase Bank Mandiri IPO sale to 20%

Govt to increase Bank Mandiri IPO sale to 20%

Dow Jones Jakarta

The government is planning to increase the size of Bank Mandiri's initial public offering to a 20 percent stake from 15 percent due to the good response from investors during the recent pre- marketing of the issue.

"We have met the underwriters for the IPO who reported the government's plan to increase the stake size of Mandiri's IPO by 5 percent," Noor Rachman, a senior official at the Capital Market Supervisory Agency (Bapepam), said on Friday.

Under the new plan, the government will sell 4 billion shares in Bank Mandiri, the country's largest bank in terms of assets, with an indicative price between Rp 568.8 rupiah and Rp 695.2 a share.

PT ABN Amro Asia Securities and PT Danareksa Sekuritas are joint underwriters of the issue.

The offer period is expected to be July 2-4, with share allocation July 9 and listing of the shares on the Jakarta Stock Exchange July 14.

The government had planned to raise between Rp 1.5 trillion and Rp 2 trillion from the IPO. Analysts said the increase in the size of Mandiri's IPO may allow the government to raise up to about Rp 2.8 trillion.

The government had originally planned to offer a 30 percent stake in the country's largest lender, but concerns about a protracted war in Iraq caused the government to cut it to 15 percent in March. Recent bullish sentiment toward Indonesia has helped boost appetite for Bank Mandiri's IPO.

Foreign investors are expected to take around 70 percent of the shares, while local investors would subscribe for the rest.