IBRA sells 20% more of Bank Niaga

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) said on Tuesday it had sold a 20 percent stake in PT Bank Niaga through the stock market for Rp 441.8 billion (US$52 million).

IBRA's chairman Syafruddin Temenggung said local investors bought 88 percent of the stake, while the remaining 18 percent were purchased by foreign investors.

"This is in line with the market placement's purpose of prioritizing local investors," Syafruddin said.

In November last year, IBRA sold a 51 percent stake in the bank to Malaysia's Commerce Asset Holding Bhd. for Rp 1.057 trillion.

Syafruddin said IBRA sold the 20 percent stake for an average of Rp 28.2 per share, higher than the price of Rp 26.5 per share paid by Commerce Asset.

It is however lower than Niaga's trading price of Rp 35 as of Tuesday.

"The share offer was 3.2 times oversubscribed," he said.

IBRA, a government agency set up to resolve the 1997-1998 banking crisis, is selling assets and local banks to raise funds to cover the budget deficit which is estimated at Rp 35.2 trillion this year. The government took control of Niaga in 1999 after injecting Rp 9.3 trillion worth of bonds to help it survive the economic crisis.

IBRA is Indonesia's 10th largest lender, while Commerce Asset is Malaysia's second largest bank.

Niaga reported a net profit of Rp 212.6 billion in the first half of the year, compared with Rp 56.4 billion a year ago as it gained from higher interest income.