Govt to sell 30% BNI stake: Official

Govt to sell 30% BNI stake: Official

Rendi A. Witular and Urip Hudiono, Jakarta

The government has decided to sell a maximum 30 percent stake
-- not 51 percent as previously announced -- in publicly listed
Bank Negara Indonesia (BNI) in the second half of this year,
according to a senior official.

"We will sell only up to 30 percent of BNI shares. We have
canceled our plan to sell a majority stake," Mahmuddin Yasin,
deputy for privatization at the office of the State Minister of
State Enterprises, told the House of Representatives Commission
IX on finance on Tuesday during a hearing.

The government had earlier planned to sell a 51 percent stake
in the country's second largest bank to a strategic investor in
an effort to raise cash for the state budget and boost corporate
governance in the state-controlled bank. The plan had been
protested by many parties, including lawmakers, on fears that the
bank would fall into the hands of foreigners, which could
subsequently affect monetary authorities' capacity to formulate
and execute policies and provide credit.

Mahmuddin said the government was awaiting the completion of
BNI's ongoing massive restructuring to restore its image
following the disclosure of a huge lending fraud.

Elsewhere, BNI vice president director Arwin Rasyid said the
bank was ready to issue subordinated bonds of up to US$300
million in June to strengthen capital and to finance credit
expansion.

"We expect to sell the bonds in June this year after road
shows in Singapore, Hong Kong, London and New York at the end of
May," said Arwin after attending a seminar on Tuesday held by
global financial advisor Morgan Stanley.

Arwin said the bonds were expected to carry a 10-year maturity
profile.

The sale of BNI shares is included in the government's 2004
privatization program, which is to raise Rp 5 trillion in cash to
help finance the state budget.

Mahmuddin also said the government would sell a 10 percent
stake in Bank Mandiri, the country's largest bank, in the second
half of the year to take advantage of the positive sentiment in
the stock market.

Earlier this year, the government sold a 20 percent stake in
Mandiri via an initial public offering, which garnered a strong
response.

Mahmuddin said other state-owned enterprises to be sold this
year included a 30 percent stake in plantation firm PT Perkebunan
Nusantara III and 14 percent each in mining company PT Aneka
Tambang and tin miner PT Timah.

He was optimistic that this year's privatization target would
be met, as the government had already raised around Rp 3.2
trillion in the first quarter.

Meanwhile, Muhammad Syahrial, president of PT Perusahaan
Pengelola Aset (PPA), a government agency assigned to manage and
sell assets transferred from troubled banks, said the government
might sell greater shares in publicly listed Bank Permata to
strategic investors in a bid to obtain premium price.

Syahrial said selling up to an 88.3 percent stake in Permata
was one of the three options being considered.

The other two options are to sell a 51 percent stake to a
strategic investor and 20 percent to public investors, or to sell
the entire 71 percent stake to a strategic investor.

The government owns 91.3 percent of Permata.

The sale is expected to take place in September or October
after receiving House approval.