IBRA to select Danamon advisor by Tuesday
The Jakarta Post, Jakarta
The Indonesian Bank Restructuring Agency (IBRA) said that it planned to select by Tuesday one out of six prospective financial advisors for the sale of a majority stake in Bank Dananmon.
"The six firms are Warburg, Goldman Sachs, JP Morgan, BNP Paribas, Bahana and Danareksa Sekuritas. We expect to announce the winner on Tuesday, or maybe Wednesday," IBRA's bank restructuring unit deputy chairman I Nyoman Sender told reporters over the weekend as quoted by Antara.
Of the six, state-owned PT Bahana Sekuritas and PT Danareksa Sekuritas are the only local firms.
IBRA wants to sell up to 20 percent of the bank through a public offering and another 51 percent stake to a strategic investor.
Selling the first stake to the public is aimed at testing the market while helping to set a benchmark price for the sale of the majority stake to the strategic investor.
According to Sender, Bank Danamon would produce satisfactory bids from investors but declined to specify the expected amount of these bids.
The publicly listed Bank Danamon is 99.4 percent owned by IBRA with the remaining stake being in the hands of the investing public.
IBRA took over Bank Danamon after extracting a cache of bad loans from the bank and replacing them with Rp 47 trillion (about US$5.2 billion) worth of recapitalization bonds following the 1997 economic crisis.
Selling Bank Danamon is part of the economic reform program under the government's Letter of Intent (LoI) to the International Monetary Fund (IMF).
The bank should have been sold by this year, but political meddling that prolonged the prior sale of Bank Niaga and a lack of investor interest pushed back the timetable.
Under the latest update to the IMF, the government expects Bank Danamon's sale to be finalized next year.
Earlier this month, IBRA secured approval for the sale from the House of Representatives' Commission IX, which oversees financial affairs.
Approval from the legislature is not mandatory, yet it is still crucial in order to avoid a political backlash during or after the sale.
Bank Danamon is the third bank on IBRA's divestment list, following the sales of majority stakes in Bank Central Asia (BCA) in March and Bank Niaga. Next after Bank Danamon is Bank Lippo.