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.