Lippo sale to be closed in September

Lippo sale to be closed in September

Bloomberg, Jakarta

Swissasia Global, controlled by Austria's fourth-largest bank, expects to complete the sale of its 52 percent stake in Indonesia's PT Bank Lippo in September.

Khazanah Nasional Bhd., Malaysia's state investment company, said July 17 it will buy the holding for between Rp 3.18 trillion (US$325 million) and Rp 3.3 trillion, more than twice what was paid by Swissasia.

"We are talking about an early September timetable to complete the sale," Chris Williams, a director at Swissasia Global, said in a telephone interview from Hong Kong on July 22. The transaction will be completed after a meeting of shareholders at the end of August, he said.

Kuala Lumpur-based Khazanah, which owns more than two dozen companies with a total market value of $16 billion, wants to invest more in regional financial services and technology businesses. Indonesia's economy is expected to grow at least 6 percent this year, the fastest in nine years, as consumers in the nation of 238 million people spend more.

"Malaysian institutions are now looking at business opportunities at the regional level, especially in Indonesia, which has a huge population," said Teguh P. Hartanto, a banking analyst at Namalatu Cakrawala Securities in Jakarta. "Swissasia Global deserves a premium price because it will sell a controlling stake in Bank Lippo."

The final purchase price for the Swissasia stake hinges on the completion of the June 30 audited accounts for the Jakarta- based lender, Indonesia's ninth-biggest, according to Khazanah.

Swissasia, led by Raiffeisen Zentralbank of Austria, bought the Bank Lippo stake in February 2004 from the Indonesian Bank Restructuring Agency for $142 million.

"We have been approached by a number of investors," Swissasia's Williams said. "We like Khazanah. The bank will be left in good hands."

Shares of Bank Lippo, which have risen 117 percent since the start of the year, compared with a 17 percent gain in the Jakarta benchmark index, rose 30 rupiah, or 2 percent, to 1,520 rupiah at the 4 p.m. local time close today.

Indonesia's Ministry of Finance has approved Swissasia Global's planned sale of its entire stake in Bank Lippo to Santubong Investment BV, a unit of Khazanah, Williams said.

Indonesia's central bank, Bank Indonesia, will start a screening test on Khazanah Nasional to determine if the Malaysian company fits the central bank's criteria as PT Bank Lippo's new owner, Bisnis Indonesia reported on July 18, citing Siti Fadjriah, a deputy governor at Bank Indonesia.

BNP Paribas advised Khazanah; Merrill Lynch & Co. represented Swissasia Global; and UBS AG advised Bank Lippo.

Khazanah controls Commerce Asset-Holding Bhd., Malaysia's second-largest lender, which owns a 61.1 percent stake in PT Bank Niaga, Indonesia's No. 8 lender.