IBRA postpones Lippo sale due to low bids
Dadan Wijaksana The Jakarta Post Jakarta
The Indonesian Bank Restructuring Agency (IBRA) has postponed the sale of a 52-percent stake in the publicly listed Bank Lippo as the bidding prices offered by potential buyers were considered too low.
IBRA chairman Syafruddin Temenggung said on Thursday that the bidding prices submitted by the three consortia shortlisted were below the re-bid price range of between Rp 384 (U.S. 4.5 cent) and Rp 591, determined earlier by the agency.
The re-bid price range was set by IBRA upon learning that the three consortia, in their preliminary bids, had submitted bidding prices which were lower than the floor price of Rp 591 per share.
"But still, all the three bid at a lower price than that range today," he said. Thursday was the last day for the interested investors to submit their final bids.
"This (low bidding prices) will surely affect the state budget," Syafruddin said, referring to the 2003 state budget, to which the proceeds of the sales was expected to go to.
It remains unclear as to what the agency will do to make up the lost proceeds.
The agency, which holds a 54.9 percent stake in the bank, will probably restart the sale next year, he added. The public (35.5 percent) and Lippo E-Net (9.6 percent) are the bank's other shareholders.
The postponement came after repeated remarks were made by Syafruddin, saying that all three shortlisted bidders vying for the bank should improve their bids.
The three consortia in question were Eurocapital Peregrine Securities, Platinum Securities Company Ltd. and Triton Advisory Pte. Ltd.
The first consortium is comprised of Singapore's Eurocapital Asia Ltd., Batavia Services Fund II, the Philippines' Exports and Industry Bank, and Euro Growth Fund.
The second groups eight companies: Summit Investment Ltd., Asia Financial Holdings Ltd., Platinum Investment Holding Ltd., Platinum Securities International Inc., Platinum Investments Pte., Granfort Holdings Ltd., Winpool Ltd. and Palette Enterprises Ltd.
The third consortium consists of Swiss Asia Global, Swiss First Bank AG, Swissfirst Opportunities Anlagegesellschaft, VP Ventures Ltd., Matrix Capital Partners and Ferell Opportunity Capital Ltd.
The government plans to sell a number of banks this year and next, to raise cash to help finance the state budget deficit and lure credible investors to the banking sector. This is expected to revive public confidence in the sector.
The government, through IBRA, became the majority owner in several banks after injecting massive amounts of bailout funds into the banks in the wake of the late 1990s financial crisis.
IBRA is tasked to nurse the banks back to health and then return them to private hands.
Aside from Lippo, IBRA plans to sell its majority stake in Bank Internasional Indonesia (BII) this year, while Bank Permata is to follow suit next year.
In the last two years, the government has sold its majority stakes in Bank Danamon, Bank Niaga, Bank Central Asia (BCA).
As of the first semester, Lippo has a total of Rp 22.5 trillion in assets, with 379 branches across the country. It employs around 6,000 workers.