Mandiri IPO price set at Rp 569 to Rp 695 per share

Mandiri IPO price set at Rp 569 to Rp 695 per share

Rendi A. Witular, The Jakarta Post, Jakarta

Bank Mandiri, Indonesia's largest bank in terms of assets,
will offer its shares to the public via an initial public
offering (IPO) at a price range of between Rp 569 and Rp 695
(around 15 U.S. cents) per share, a government official said.

State Minister for State Enterprises Laksamana Sukardi said
this was a good price target, representing between 0.9-1.1 times
the bank's book value.

"We hope to be able to sell the shares at a good price as the
timing of the IPO is appropriate amid the country's improving
macroeconomic picture and a bullish stock market," he said during
the bank's public expose on Wednesday.

According to the president of securities firm PT Danareksa
Sekuritas, Wahzary Wardaya, who was speaking in a press briefing,
Bank Mandiri's book value is around Rp 12.64 trillion, or roughly
Rp 632 rupiah a share.

Danareksa and PT ABN Amro Asia Securities Indonesia are the
underwriters for the IPO.

The government plans to sell a 15 percent stake (or around
three billion shares) in Bank Mandiri, in the largest IPO so far
this year.

All proceeds from the privatization program will go to help
finance the 2003 state budget deficit, estimated at about Rp 34.4
trillion, or 1.8 percent of gross domestic product.

The final pricing for the IPO will be decided on June 23 while
the offering is scheduled to take place from July 2 to July 4,
and the shares will be listed on the stock exchange on July 14.

Bank Mandiri president E.C.W Neloe told the press that a large
part of the IPO, around 70 percent of the shares, would be
allocated to foreign investors, while the remaining 30 percent
would be for the local investors.

Neloe explained that foreign investors were being targeted in
the IPO because they had greater investment power than local
investors.

However, he added that the composition could change depending
on local demand.

To attract investors to buy the shares, Bank Mandiri plans to
allocate 50 percent of its 2003 net profit on a dividend, a
promise that analysts said was aimed at appeasing investors who
are worried that the bank's profits might be used mainly to cover
past accumulated losses.

Bank Mandiri was formed via a merger of four state-owned banks
in 1999. Before the merger, all of these banks (Bank Export
Import Indonesia, Bank Pembangunan Indonesia, Bank Bumi Daya and
Bank Dagang Negara), had been suffering financial losses.

The Bank Mandiri IPO has suffered several delays due to
various problems ranging from administrative and legal snags to
strong protests against the government privatization program and
unfavorable stock market conditions.