IBRA extends bid deadline for Bank Lippo stake
The Jakarta Post, Jakarta
A consortium led by Swissfirst Bank AG, the only remaining bidder in the current sale of the government's majority stake in Bank Lippo, will have until Jan. 30 to submit its final bid after the Indonesian Bank Restructuring Agency (IBRA) extended on Friday the initial Jan. 26 deadline.
IBRA deputy chairman for bank restructuring I Nyoman Sender said on Friday that the extension was meant to give the consortium more time to carry out its due diligence investigation and eventually increase its bidding price.
He did not mention what steps would be taken if the consortium, called the Swissassia Global, refused to raise its offer.
The sale of the Bank Lippo stake, expected to be concluded in mid-February, was the agency's second attempt to return the bank, formerly belonging to the Riady family, to private hands. The first effort failed to generate reasonable offers, the agency claimed, forcing it to cancel the sale in October last year.
As reported, the consortium offered Rp 403 per share, way below the Rp 591.5 per share set by IBRA as the minimum price. At the current price of Rp 525 on the stock market, the sale of a 52 percent stake in the bank should generate more than Rp 1 trillion in proceeds.
The ongoing sale process should provide a test for the agency as to whether it will maintain its stance regarding a reasonable price, especially as the agency is now rushing to unload its remaining assets to meet this year's target of raising Rp 5 trillion in proceeds before its term expires next month.
The agency took over assets from bank owners and failed banks following the late 1990s financial crisis.
IBRA currently has a 54.9 percent shareholding in Lippo, the country's 11th-largest bank, while public investors own 35.5 percent. The remaining 9.6 percent is held by Lippo E-Net, controlled by the Riady family.
Lippo has some Rp 22.5 trillion in assets, with 379 branches across the country. It has around 6,000 employees.
Aside from the Swissfirst Bank -- a subsidiary of investment brokerage and private bank Swissfirst AG, other members of the consortium include Chaffron Ltd. (owned by Austria's Raiffeisen Zentralbank Osterreich AG), Matrix Asia Holding Ltd., ASM Investment Ltd. and Ferrell Opportunity Capital Ltd.
Elsewhere, Sender also disclosed that the agency would meet with the House of Representatives soon to seek approval for the sale of a controlling stake in Bank Permata.
House consent is not mandatory but is crucial to avoid a possible backlash in the future.
Over the last three years the government has sold majority stakes in Bank Danamon, Bank Niaga, Bank Central Asia (BCA) and Bank Internasional Indonesia (BII).