IBRA sets rights issue of Bank Bali by end of January
IBRA sets rights issue of Bank Bali by end of January
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) wants to launch Bank Bali's rights issue by the end of this month because a further delay would inflate the cost of the bank's recapitalization.
IBRA deputy chairman Farid Harianto said his agency was consulting with various parties, including the Capital Market Supervisory Agency (Bapepam), on how to speed up the process toward recapitalization.
"If you ask me when we want the right issues to be held, I would say by the end of this month. But everything would depend on Bapepam," he said.
Bank Bali's rights issue, initially scheduled for last October, was delayed until early January due to the high-profile scandal.
The plan again met a hurdle when Bapepam refused late last month to approve Bank Bali's rights issue plan due to inadequate disclosure of information.
Bapepam contended that Bank Bali and IBRA failed to provide necessary details on Bank Bali's shareholders, especially Deutsche Boerse Clearing AG (DBC) of Germany which reportedly controls up to 40 percent of the bank.
But Farid said neither IBRA nor Bank Bali knew about DBC and who was behind the investor. He argued that Bapepam was amiss in not being aware of DBC's involvement in the bank.
"Bapepam should have used its authority regarding the acquisition of Bank Bali's stake by DBC, which was conducted without a tender offer process," he said.
Farid said IBRA's main interest was to see a speedy recapitalization of Bank Bali because a further delay would be costly to the government.
He said President Abdurrahman Wahid, in an earlier meeting with IBRA chairman Glenn Yusuf, also expressed his wish to see the recapitalization of Bank Bali done at "full speed".
If Bapepam does not clear the process of Bank Bali's rights issue by the end of this month, the issue would have to be delayed until the end of March.
If that happened, Farid said, Bank Bali would not be allowed to use its June financial report as the basis for the rights issue. The bank would have to use its September financial statement due to the delay, requiring a further three months for the completion of the audit.
"The cost of Bank Bali's recapitalization will definitely increase. But we don't know yet how much it will cost until a further due diligence is conducted."
The cost of Bank Bali's recapitalization to bring its capital adequacy ratio to 4 percent was initially estimated at Rp 4.1 trillion (US$585 million).
Meanwhile, Bank Bali's acting president Henry Koenaifi said the bank currently suffered a loss of around Rp 30 billion per month from negative spread, which is when the bank's interest expenses are much higher than its investment.
Before his entrance, he said, the bank suffered between Rp 60 billion and Rp 70 billion from negative spread.
Farid also revealed on Tuesday that two foreign investors and one investor linked to a local company expressed interest in acquiring IBRA's stake in Bank Niaga.
The agency will open bidding for the stake next week, Farid said without giving a specific date.
The total cost of recapitalizing the bank is estimated at around Rp 7 trillion.
Farid said IBRA may have to merge Bank Niaga with Bank Danamon if the agency failed to find investors for Bank Niaga, or if the bids presented by the interested investors were considered too low by the government. (rid)