Govt to start sale of Bank Permata next month

Dadan Wijaksana, Jakarta

The government said on Tuesday it would begin the sale of a majority stake in Bank Permata next month, by launching a road show in several Asian nations to test the interest of foreign investors.

Mohammad Syahrial, president of the Asset Management Company (PPA) -- a state agency in charge of assets formerly controlled by the now-defunct Indonesian Bank Restructuring Agency (IBRA), said the road show would be conducted in late July.

He did not mention which nations it would involve.

"The process of selling (a stake in) Permata, which will begin next month, is scheduled to be completed by the end of the year," said Syahrial.

The remarks, which should reaffirm the government's commitment to its divestment program, came a day after State Minister for State Enterprises Laksamana Sukardi -- whose office oversees state-owned companies, rejected a proposal to merge Bank Permata with publicly listed Bank Negara Indonesia (BNI).

"A stand-alone bank status for respective banks is better so as to create healthy competition within the banking sector," Laksamana said on Monday.

The merger proposal has been aired by the management of BNI, in what it called an effort to create a sound synergy between the two banks which are deemed complementary in terms of strength. BNI is one of leaders in corporate lending, while Permata is a major force in the consumer, SME and retail sectors.

Permata, 92 percent of which is owned by the PPA as the government's representative, is included in the government's list of banks to be sold this year, with the House of Representatives having agreed to sell 71 percent of the stake.

Permata itself emerged from a merger process of five banks two years ago; Bank Bali, Bank Universal, Bank Arthamedia, Bank Prima Express and Bank Patriot to become the country's top-10 lenders with assets of some Rp 30 trillion.

Syahrial said he was optimistic about the road show and that even now, the sale had drawn interest from potential bidders -- both local and international including one from Standard Chartered Bank.

He did not reveal the other interested parties.

The proceeds from the sale of Permata will help finance the 2005 state budget deficit.

Meanwhile, BNI president Sigit Pramono had earlier said that the bank would accept the government's decision on the merger plan.

"It's up to the government as the bank's major shareholder to decide on that. We've aired the idea of the merger based only on a commercial calculation.

"We see that as an opportunity both for BNI and Permata to create a strong synergy," Sigit said.

The House has also approved plans to sell a 30 percent stake in BNI later this year.

Elsewhere, Syahrial said that the government had shortlisted five foreign investment banks as advisors to the Bank Permata sale.

ABN Amro, CSFB, UBS Warburg, JPMorgan and Merrill Lynch are being considered as financial advisers for the Permata sale, he said.