Korea-Singapore consortium wins BII stake
The Jakarta Post, Jakarta
A consortium led by South Korea's Kookmin Bank and Singapore's Temasek Holdings Pte. Ltd. was named on Wednesday as the winning bidder for a 51-percent stake in Bank Internasional Indonesia (BII).
The consortium, Sorak Financial Holdings Pte. Ltd., won over sole contender Panin consortium for the majority ownership in the publicly listed bank, after agreeing to raise its bidding price, Indonesian Bank Restructuring Agency (IBRA) deputy chairman Sumantri Slamet told reporters.
"We accept the terms proposed by the Kookmin and Temasek consortium. Now, we'll let Bank Indonesia conduct a fit and proper test on the consortium," he said.
Although IBRA chose the Sorak consortium as its preferred bidder on Tuesday, the agency demanded the consortium improve its bid and terms in the sale and purchasing agreement (SPA), which was submitted to the agency early this week.
Although its price was lower than that offered by the Panin consortium, the South Korean-Singaporean grouping was named the preferred bidder, besting Panin in its overall valuation, which includes a review of their business plan and SPA.
Malaysia-based ICB Financial Group Holdings and Barclays, a top lender in Britain, are the other members of the winning consortium. Temasek, an investment arm of the Singapore government, is also part of the consortium through its unit Asia Financial Holdings.
The Panin consortium groups Austria's leading bank Raiffeinsen Zentralbank Osterreich and Fleur Enterprises, which is based in British Virgin Islands, and local Panin Bank.
Sumantri disclosed that Sorak's revised offer valued BII's stake at 1.2 times the book value of Rp 68 per share. He did not mention the original offer.
BII was taken over by the agency from business giant Sinar Mas group after it was crippled by the banking crisis in the late 1990s. IBRA, in return, received a 93.7-percent stake in the bank.
After Wednesday's deal becomes official -- that is, after the central bank has completed the fit and proper and approved the Sorak consortium -- the agency's ownership in the bank would be cut to 42.7 percent, with public investors holding the balance.
BII is now listed among the country's top 10 banks, with assets of more than Rp 36 trillion (US$4.1 billion) and 1.1 million customers.
In addition to BII, IBRA has sold three other banks in the past two years: Bank Central Asia (BCA), Bank Niaga and Bank Danamon. A consortium led by Temasek was the winning bidder of a 51-percent stake in Danamon.
IBRA's bank sales program aims to strengthen the banking sector and at the same time, generate proceeds to help cover the budget deficit.