IBRA starts selling Niaga shares through market

IBRA starts selling Niaga shares through market

Dadan Wijaksana, The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) has asked PT
Trimegah Securities to gradually start selling the agency's
shares in the publicly-listed Bank Niaga via the stock market.

"We asked Trimegah Friday to start the sale, in limited
volume," IBRA deputy chairman for bank restructuring unit I
Nyoman Sender told reporters Monday.

IBRA has planned to sell up to a 20 percent stake in Bank
Niaga via the stock market in a bid to test investors' appetites
and seek a price benchmark for the sale of another 51 percent
stake to strategic investors.

The agency has appointed Trimegah as its chief financial
adviser for the secondary offering.

Sender fell short of saying how many percent of the shares
were to be sold to the market at this stage, saying that he had
to make calculations first.

IBRA had initially planned to sell a 51 percent stake in the
mid-sized bank to strategic investors but the sale was canceled
last month because the only two bidders, consortia led by
Australia's ANZ Banking Group and Commerce-Assets Holding Bhd.,
offered low prices.

The Financial Sector Policy Committee (FSPC), which groups
several senior economics ministers and has the final say on the
agency's major asset sale program, then ordered IBRA to seek
other divestment mechanisms to obtain greater proceeds.

IBRA controls more than a 97 percent stake in Bank Niaga after
the government bailed out and recapitalized the bank in the late
1990s, while the public holds the remaining stake.

Sender reaffirmed IBRA's stance that the secondary offering
mechanism was merely aimed at testing the market price, and if
the price tends to go down below the floor price, the agency
would stop the mechanism.

"That's why we'll keep a close eye on the daily movement of
the shares," he said.

On Monday, Niaga shares closed at Rp 45. By comparison, the
shares were valued at Rp 70 when the initial strategic sale plan
was canceled.

In a related development, the appointment of Trimegah could
create new controversy as the Business Competition Supervisory
Commission (KPPU) last month said the company was involved in the
Indomobil scandal and barred it from having business
relationships with IBRA for a certain period.

However, M. Nawir Messi, KPPU director executive, refused to
comment, saying that the commission would issue official
statements later regarding the matter.

The Niaga sale process, scheduled to be completed by mid-
September, is part of the agency's divestment plan for this year,
in a bid to generate proceeds to help finance this year's state
budget deficit, projected at more than Rp 42 trillion.

Aside from Niaga, the government would also launch the
majority stake in Bank Danamon by the end of this month, or early
August at the latest with the sale of shares in Bank Lippo next
on the list.

IBRA has been targeted to raise more than Rp 35 trillion in
cash in 2002.