IBRA won't delay BCA IPO amid dull market
IBRA won't delay BCA IPO amid dull market
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
won't delay its overseas road show plan for the initial public
offering (IPO) of Bank Central Asia (BCA) despite the sluggish
conditions in international stock markets, according to agency
deputy chairman Jerry Ng.
Jerry expressed optimism that the market would remain
enthusiastic for the BCA IPO.
"We'll be consistent with our plans... Stock markets always
go up and down, so we don't have to be worried," he told The
Jakarta Post and Kompas dailies on Tuesday.
IBRA is planning to make overseas presentations to several
international financial centers in a pre-marketing exercise to
generate interest in the BCA IPO. The road show will last from
April 26 to May 9.
IBRA plans to divest between 15 percent and 30 percent of BCA
shares through an IPO on May 19-23. The indicated price is set
at Rp 1,350 to Rp 1,750 per share.
The divestment plan is part of efforts by IBRA to raise Rp
18.9 trillion this year to help finance the 2000 state budget.
IBRA nationalized BCA in 1998 after the bank's former owners
could not repay debts to the government; the bank also breached
the legal lending limit ruling.
World stock markets are currently under pressure after
investors and institutions in the U.S. dumped shares on Friday
causing the DOW industrial index and the tech heavy Nasdaq
composite index to plunge.
The Jakarta Stock Exchange plunged 4.9 percent on Monday, and
continued to fall by 0.2 percent on Tuesday with the composite
index closing at 528.259 points.
Bank Niaga, Danamon
Separately, Jerry said at a press conference that IBRA
expected publicly listed Bank Niaga to be recapitalized this week
by injection of some Rp 8.67 trillion in recapitalization bonds.
The government initially planned to recapitalize Bank Niaga,
also a nationalized bank, last month.
Jerry also reported that the planned merger of Bank Danamon
with eight other nationalized banks was on track.
He said that the legal merger would be completed by the end of
May and the operational merger would be realized in September.
Bank Danamon was nationalized by IBRA in 1998 and it has already
been recapitalized by the government.
Jerry said that the government had to inject another Rp 30
trillion in recapitalization funds into Bank Danamon to allow it
to acquire the eight non-recapitalized banks without having to
suffer a negative capital adequacy ratio (CAR).
The eight smaller banks still have a negative CAR because they
have not been recapitalized.
Jerry said that Bank Danamon would have a CAR level beyond the
minimum 4 percent requirement after the merger was completed.
(rei)