IBRA to start sale of Bank Danamon, Bank Niaga

IBRA to start sale of Bank Danamon, Bank Niaga

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) said it would
start an auction for 20 percent shares in publicly listed Bank
Danamon on Thursday, in a process it expects to complete within
two weeks.

"We will open the door for as many investors as possible,"
IBRA Chairman Syafruddin Temenggung said on Tuesday.

He did not provide further details, but said that IBRA
expected to sell it at a floor price of Rp 1,200 per share,
similar to the price paid by a consortium of Temasek Holdings
Pte. Ltd., and Deutsche Bank in early May when it acquired a 51
percent stake in Danamon.

Temasek is an investment arm of the Singapore government.

IBRA currently holds around 48.13 percent shares in Danamon.

The agency has initially planned to sell 20 percent of the
shares not long after the disposal of the 51 percent stake. But
the plan has been delayed, which some IBRA officials say is due
to the disappointing market reaction. People familiar with the
situation, however, said that the delay was due to a fee dispute
with the investment banks arranging the sale.

IBRA has declined to comment on this.

Meanwhile, Syafruddin said the auction of the 20 percent stake
in publicly listed Bank Niaga would also start some time this
week with the floor price to be determined later.

Last year, IBRA sold a 51 percent stake to Malaysian group
Commerce Asset Holding Bhd. IBRA still own a 45.1 percent stake
in the bank.

The divestment of the two banks form part of IBRA's efforts
to restructure the country's banking sector. By involving as many
private investors as possible, it is expected the banks would
promote professionalism, thus reviving public confidence in the
banking sector.

Equally important, the government could also rake in the
proceeds to be used in part to help cover the 2003 state budget
deficit.