Korea-Singapore consortium wins BII stake

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.