Fri, 05 Dec 2003

Lippo sale relaunched, old bidders given priority

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) has relaunched the sale of a 52 percent stake in the publicly listed Bank Lippo, through a strategic sale mechanism it expects to complete by February.

IBRA was scheduled to complete the sale in October, but it was postponed due to the low prices offered by three bidders.

However, IBRA deputy chairman In Nyoman Sender said on Thursday that the three investors would be given priority during the current sale if they were willing to rebid.

"The old bidders will have priority because we have limited time, but new bidders are also welcome," Sender told a press conference.

The sale of the Bank Lippo stake comes ahead of IBRA's closure at the end of February after five years in operation. With the planned closure, IBRA has to press ahead with unloading its remaining unsold assets, so as to avoid a backlash for failing to meet its mandated task. The agency took over assets from bank owners and failed banks following the late 1990s financial crisis.

The three initial bidders were Eurocapital Asia Ltd., Summit Investment Ltd. and Swissasia Global.

IBRA owns a total of 54.9 percent shares in Lippo, while public investors own 35.5 percent. The remaining 9.6 percent is held by Lippo E-Net, which is controlled by the Riyadi family, the founder and former controlling owner of the bank.

IBRA has said that the postponement of the initial auction was unavoidable as the prices submitted by the three bidders were below the re-bid price range of between Rp 384 and Rp 591, determined earlier by the agency.

The re-bid price range has been set by IBRA upon learning that all of the bidders, in their preliminary bids, had submitted bidding prices which were lower than the floor price of Rp 591 per share.

Sender did not say whether the agency expected higher bidding prices in the second sale, or what would be the anticipatory moves if the prices offered remained unsatisfactory.

A press statement said that IBRA had appointed ING Securities Indonesia and ING Bank NV as financial advisors, and the law offices of Ali Budiardjo, Nugroho, Reksodiputro as legal advisors.

The bank's non-audited consolidated financial report said that as of September, Lippo had booked a net profit of 27.6 billion (US$3.27 billion), with total assets of Rp 25.8 trillion -- the country's eleventh largest.

The capital adequacy ratio (CAR), a comparison between a bank's capital with its risk-weighted assets, stood at 23.6 percent, far above Bank Indonesia's minimum requirement of 8 percent. Its non-performing loans (NPLs) was at 2.89 percent.