IBRA to auction 51% Bank Niaga stake next week
IBRA to auction 51% Bank Niaga stake next week
Dow Jones, Jakarta
Indonesia will again attempt to sell a majority stake in state-owned Bank Niaga via an auction to be held next week.
"We will start selling the bank shares through an auction system next week," Indonesian Bank Restructuring Agency Chairman Syafruddin Temenggung told reporters Tuesday.
He said he expects the sale for the 51 percent stake to be completed in a month, with the winner of the auction likely to be announced in September.
This will be the second attempt by IBRA to sell a majority stake in Bank Niaga. In May, IBRA canceled a tender offer for a 51 percent stake sale after it said the bids from two shortlisted investors were well below the market price at the time. Unlike previously when the government had the discretion to reject tender bids it deemed too low, the highest bidder will get the 51 percent stake in Bank Niaga in next week's auction.
The sale of Bank Niaga is key to Indonesia's latest agreement with the International Monetary Fund, with the country pledging to sell Bank Niaga by September.
Asset sales are crucial to raise money to reduce some of the huge debt the government built up trying to stave off financial collapse after the crisis. IBRA is tasked with raising Rp 42 trillion (US$4.7 billion) for this year's government budget, but it is well behind the target, having only raised Rp 16.5 trillion so far this year.
The government currently holds a 97.15 percent stake in Bank Niaga. It plans to sell a 71 percent stake in the bank through the stock market and an auction. The government recently said that since July 1, it has sold a 0.4 percent stake in Bank Niaga through the stock market for a total Rp 2.9 billion, which works out to an average price of Rp 45 for each share.
Achmad Junaedi, director of the country's largest state-owned pension fund Jamsostek, said Tuesday that Jamsostek plans to buy between a 5 percent and 10 percent stake in Bank Niaga through the stock market.
He didn't disclose at what price the fund will buy the bank shares.
Shares in Niaga at mid-afternoon Tuesday were up 12.5 percent, or Rp 5, at Rp 45.