IBRA and IMF differ on Bank Niaga divestment plan
IBRA and IMF differ on Bank Niaga divestment plan
The Jakarta Post, Jakarta
The International Monetary Fund (IMF) said the sale of the
government's 51 percent stake in publicly listed Bank Niaga
should be carried out as scheduled, although the government has
hinted that it might back down from the plan if the prices
offered by bidders were too low.
IMF senior advisor for Asia Pacific Daniel Citrin, who heads
the visiting IMF delegation to the country, said that there was
no change in the schedule for the sale of the medium-sized bank.
"We are committed to selling it within a competitive and
transparent procedure. There is no change in targets," he said on
Monday.
Separately, however, the Indonesian Bank Restructuring Agency
(IBRA) said that it might scrap the plan should the bidders offer
a price tag that falls far below the market price.
"The government will not sell the majority stake if the final
bid is below half the market price," I Nyoman Sender, IBRA deputy
chairman for the bank restructuring unit, said.
His remarks followed an announcement that Niaga's bidders had
submitted their offers on Monday at a maximum of only about one-
third of Niaga's share price.
Nyoman said the bids from the four short-listed bidders were
in the range of Rp 15 to Rp 25 per share.
On Monday, the share price of Bank Niaga dropped to Rp 80.
In its bid to consolidate the country's banking sector, whose
performance has been disappointing, and to raise cash to help
finance the state budget, IBRA plans to sell a controlling stake
in Bank Niaga in a process it hopes to be completed by June.
IBRA expects the final bid for the Bank Niaga stake to be made
on May 27.
Restructuring the banking sector is an important part of the
country's economic reform package agreed to with the IMF.
There are currently four bidders for the Bank Niaga stake, two
of which are a foreign-led consortia.
The four are a consortia led each by Australia & New Zealand
(ANZ) Banking Group Ltd., Malaysian financial group Commerce
Asset-Holdings Berhad, Bank Victoria International and Batavia
Investment Fund.
Asset-Holdings Group owns Malaysia's third largest banking
group Bumiputera-Commerce.
Batavia Investment Fund is an Indonesian-based fund and was
part of a consortia led by Singapore's Cycle & Carriage (C&C),
which won the bid for about 40 percent of auto giant Astra
International two years ago. C&C now holds 32 percent of Astra.
The government, through IBRA, holds 97.15 percent of Bank
Niaga.
Niaga's sale comes after IBRA successfully completed the
disposal of the long-stalled 51 percent of BCA last month, with a
consortium, led by U.S.-based investment firm Farallon Capital,
emerging victorious.
Getting credible investors from the divestment of local banks
has been the government's priority in helping revive confidence
in the banking industry.
Moreover, the government could use part of the proceeds to
help cover the 2002 state budget deficit, which is projected to
stand at about Rp 42 trillion (about US$4.6 billion).
The agency has been targeted to collect Rp 42.8 trillion from
state asset sales this year.
The bank managed last year to post Rp 41.1 billion in net
profit in the first ever positive balance sheet since the
devastating financial crisis struck in 1997.
Also last year, the bank's credit adequacy ratio (CAR) stood
at 18.7 percent, while its non-performing loans reached 9.75
percent.