IBRA to select Danamon advisor by Tuesday

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.