Investors want majority stake in Permata

Investors want majority stake in Permata

Rendi A. Witular, Jakarta

Several strategic investors interested in Bank Permata have
urged the government to sell at least 71 percent of its stake in
the country's seventh-largest bank, according to an official.

"The investors want to have full control in Permata ... and an
ability to put in place their preferred board of management,"
said president director of PT Perusahaan Pengelolaan Asset (PPA)
Mohammad Syahrial after a hearing with House of Representatives
Commission IX for finance on Tuesday.

The government, which has a 97.17 percent stake in publicly
listed Permata, plans to sell the bank this year to raise cash to
help finance the state budget deficit. The Permata stake is
currently managed by PPA, an asset management company under the
Ministry of Finance.

Syahrial said that the request from investors could be
accommodated in one of the government's three divestment options
for Permata, to be proposed to Commission IX for approval on July
14.

The three options are to sell a 51 percent stake in the bank
to strategic investors and another 46.17 percent to public
investors via the stock market; sell a 71 percent stake to
strategic investors and 26.17 percent to the public; or sell the
entire government stake at once to strategic investors.

The government has hired ABN Amro Holdings NV to help arrange
the stake sale later this year, and 19 investors -- 12 foreign
and seven domestic -- have expressed an interest in participating
in the bidding.

Among the strategic investors interested are Singapore's
Temasek, Bank Central Asia (BCA), Bank Danamon, Bank Panin and
Bank Artha Graha.

PPA received a recommendation from Commission IX to prioritize
local investors in order to create healthy competition in the
banking industry, as an increasing number of foreign investors
have recently gained control in local banks.

The government, which is expected to reap around Rp 3 trillion
(US$340 million) from the Permata sale, is scheduled to announce
the winner of the bid in the fourth week of October.

Elsewhere, Bank Central Asia (BCA) vice president director
Jahja Setiaatmadja said that currently the bank was still seeking
to form a consortium, consisting of several banks or financial
institutions, with the aim of participating in the Permata
bidding process.

"We are still looking for interested investors. They can be
domestic or from overseas, as long as they have sufficient
capital and a good reputation," said Jahja after attending a
ceremony held by the Jakarta Stock Exchange.

Jahja said that the consortium should have at least about Rp 3
trillion in cash to take over the entire government stake in
Permata.

Jahja explained that BCA needed to form a consortium because
banking regulations limit the size of a bank's investment in a
single entity to not more than 10 percent of its net equity.

"We are hoping to come up with the consortium soon. But BCA is
not going to lead the consortium," he said.

As of the first quarter of this year, BCA had an equity of Rp
13.46 trillion and assets valued at Rp 136.2 trillion.

According to Jahja, as of the first semester of this year, BCA
had recorded an increase in its outstanding loans to Rp 33.44
trillion from Rp 29.3 trillion at the end of last year. The bank
expected that lending to grow to around Rp 39 trillion by the end
of this year.