IBRA to sell 20% Danamon stake on market

IBRA to sell 20% Danamon stake on market

Dow Jones, Jakarta

The Indonesian Bank Restructuring Agency (IBRA), plans to sell a 20 percent stake in PT Bank Danamon Indonesia on the market first before selling a larger 51 percent stake to strategic investors next month.

IBRA Chairman Syafruddin Temenggung said late Monday the initial sale is aimed at obtaining a benchmark price for the subsequent sale of a majority stake to strategic investors.

Syafruddin added Danamon will undergo a reverse stock split before IBRA sells the stake to boost its share price.

The government, which holds a 99.36 percent stake in Bank Danamon, has promised the International Monetary Fund it would sell a majority stake in the bank to strategic investors in July.

But the sale was delayed due to political meddling and lack of interest from foreign investors in Indonesian assets amid legal uncertainties.

But, the government is under tremendous pressure to sell assets this year to raise cash for the state budget as the recent Bali bombing is expected to hurt revenue from taxes.

IBRA is currently finalizing the sale of a 51 percent stake in PT Bank Niaga to Malaysia's Commerce Asset Holding Bhd. for around US$120 million.

It also plans to sell PT Bank Lippo, in which the government has a 59 percent stake, later this year.