IBRA shortlists four bidders for Bank Niaga
Dadan Wijaksana, The Jakarta Post, Jakarta
The Indonesian Bank Restructuring Agency (IBRA) announced on Tuesday it had shortlisted four bidders, two of which are foreign-led consortia, for a 51 percent stake in mid-sized Bank Niaga.
The four bidders are consortia led by Australia & New Zealand (ANZ) Banking Group Ltd., Malaysian financial group Commerce Asset-Holdings Berhad, Bank Victoria International and Batavia Investment Fund.
Asset-Holdings Group owns Malaysia's third largest banking group, Bumiputera-Commerce.
Batavia Investment Fund is an Indonesian-based fund and was part of a consortia led by Singapore's Cycle & Carriage (C&C) that won the bid for a 40 percent stake in auto giant PT Astra International two years ago. C&C now holds a 32 percent stake in Astra.
Bank Victoria is a relatively small bank listed on the Jakarta Stock Exchange.
The agency did not provide details on other members of investors in each consortium.
Meanwhile, Dow Jones reported that according to Paul Edwards, ANZ spokesman in Melbourne, the bank's involvement in the consortium is through its 11 percent stake in Indonesia's Panin Bank.
"As such we would assist Panin where possible, however, the extent of our involvement/assistance is still to be determined," Edwards said.
IBRA will now provide time for the four bidders to carry out due diligence on the bank before submitting their final binding bid. The agency has targeted to complete the sale process in June.
The government, via IBRA, nationalized Bank Niaga in the late 1990s. It now holds a 97.15 percent stake in the publicly listed bank.
The Bank Niaga sale comes after the government completed the sale of a 51 percent stake in Bank Central Asia (BCA) last month to a consortium led by U.S. investment firm Farallon Capital Corp. BCA is the country's largest retail bank.
It was also revealed in the statement that IBRA would apply a similar scoring system as it did in the BCA sale.
Investors can get a maximum 40 points for "financial institution experience," but only up to 20 points for a "non- binding bid price".
There are other points awarded, depending on how many conditions investors attach to their bids, their ability to pay for the stake, and experience in mergers and acquisitions.
The Bank Niaga disposal should provide further tests for the government on whether it will carry on with its economic reform program.
The sale of government shares in nationalized and recapitalized banks is part of a bank restructuring program agreed with the International Monetary Fund.
Getting credible investors for local banks has been the government's priority, to help revive confidence in the banking industry.
Moreover, the government could use part of the proceeds to help cover the 2002 state budget deficit, projected to stand at around Rp 42 trillion (US$4.4 billion).
The agency, which has taken over around Rp 600 trillion worth of assets from ailing banks, has been targeted to collect Rp 42.8 trillion from asset sales this year.
Shares in Bank Niaga were slightly down to Rp 170 on Tuesday from Rp 175 on the Jakarta Stock Exchange.
The medium-sized bank last year managed to post Rp 41.1 billion in net profit, the first positive balance sheet ever since the devastating 1997-1998 financial crisis.
Also last year, the bank's credit adequacy ratio (CAR) stood at 18.7 percent, while its non-performing loans reached 9.75 percent.
PT Trimegah Securities, Kartini Mulyadi and Partners are acting as the respective financial and legal advisors in the Bank Niaga sale.