IBRA seeks higher price for Bank Niaga

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) said on Thursday it would ask Malaysia's Commerce Asset Holdings Bhd to raise its bid for a 51 percent stake in Bank Niaga to Rp 30 (about 0.3 US cents) per share.

"We will ask for twice the price of its book value," said IBRA's Bank Restructuring Unit deputy chairman I Nyoman Sender after meeting with the House of Representatives' Commission V for industry and trade affairs.

The book value of Bank Niaga's shares are at Rp 15. Nyoman said he would meet Commerce representatives either Thursday or Friday to discuss the new price scheme.

"We might rearrange their sales and purchase agreement," he added when asked what IBRA had to offer should Commerce agree to the doubling of the price.

The Malaysian investor is reportedly the only bidder left out of four. The other three were Indonesia's Panin Bank, Bank Victoria and the Batavia Fund. Australia & New Zealand Banking Group owns a minority stake in Panin Bank. IBRA will announce its final decision next month.

Commerce has offered a price of Rp 26.5 a share, which State Minister for State Enterprises Laksamana Sukardi earlier called a "realistic" offer.

The offer might have secured Commerce the deal, however the House instructed the government to negotiate for a higher price.

It marked the second time that legislators blocked attempts to sell shares in Bank Niaga, after IBRA canceled the first auction in June.

The government owns a 97 percent stake in Bank Niaga since injecting the bank with recapitalization bonds to keep it afloat during the 1997 economic crisis.

IBRA is selling off assets it acquired from ailing banks in exchange for the recapitalization bonds.

The sale of Bank Niaga is also mandated under the economic reforms program of the International Monetary Fund (IMF), which requires IBRA to finalize the sale this year.

Proceeds of the sale will help finance this year's state budget deficit, estimated to be at Rp 42 trillion.