IBRA gets bids for 51 percent stake in publicly listed BII

IBRA gets bids for 51 percent stake in publicly listed BII

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) said on Friday it
had received three preliminary non-binding bids for a 51 percent
stake in publicly listed Bank International Indonesia (BII).

The agency said in a press statement that the consortia were
each led by Indonesia's Bank Panin, Singapore's United Overseas
Bank, and Sorak Financial Holding Pte. Ltd.

IBRA did not name the members of the first two consortia, but
the Sorak Financial consortium consisted of South Korea's Kookmin
Bank and Singapore's Asia Financial Holding Ltd.

The agency said it would announce the wining bidder sometime
in the first or second week of November.

The government via IBRA took a controlling 93.7 percent stake
in BII following bailout measures during the late 1990s financial
crisis.

BII is one of the country's top 10 banks with assets worth
more than Rp 36 trillion (US$4.28 billion) and 1.1 million
customers.

The bank was previously the financial arm of the Sinar Mas
conglomerate, the second largest business group in the country
prior to the 1997 Asian economic crisis.

"The divestment program is also expected to obtain the right
partner that can (help) develop and boost the performance of
BII," the agency said in the statement.

One of IBRA's mandates is to restructure ailing banks and
divest government stakes in the banks to raise cash to help
finance the state budget, which has been heavily burdened with
the huge bank bailout cost.

Earlier this week, IBRA announced that three consortia
consisting of 18 local and foreign firms had submitted
preliminary bids for a 52 percent stake in publicly listed Bank
Lippo. The agency is also expected to name the winning bidder
next month.

Next year, the government plans to sell a majority stake in
Bank Permata.

In the last two years, the government has sold its majority
stakes in Bank Danamon, Bank Niaga and Bank Central Asia (BCA).

Some 51 percent of BCA shares were sold to Farindo Investment
in March last year, raising around Rp 5.6 trillion in cash.

A majority 51 percent stake in Bank Niaga was sold to
Malaysia's Commerce Asset in November for 1.06 trillion, and also
51 percent of the shares in Bank Danamon were sold to a
consortium called Asia Financial for Rp 3.08 trillion.

These banks were sold for between 1.2 and 1.45 times the book
value.

The recent initial public offering (IPO) of state-owned Bank
Mandiri, the country's largest bank in terms of assets, was also
a success, raising some Rp 2.7 trillion in cash for the
government's coffers.

The government is now planning to launch an IPO for Bank BRI,
another giant state-owned bank, later this year to help finance a
state budget deficit estimated at 1.9 percent of gross domestic
product. Some 30 percent of the shares in the bank would be sold
to the public investors.