Mashill to boost capital

JAKARTA (JP): Publicly listed Bank Mashill will issue rights shares next month to partly finance its recapitalization program, the bank said on Thursday.

It announced it was also seeking new investors to meet the minimum capital requirement set by Bank Indonesia.

"Our prospective foreign investor has appointed its financial advisor to negotiate with us," Mashill president Dradjat Bagus Prasetyo said.

Bank Mashill announced in mid January it was ranked in the "B" category by Bank Indonesia, making it eligible to join the government's recapitalization program.

"B" category banks are recapitalized under an arrangement in which the government provides 80 percent of needed recapitalization funds through issuance of bonds. The remainder must be provided by the owners or invited domestic or foreign investors.

Banks in the "B" category are those whose CAR level -- the ratio between equity and risk-weighted assets -- falls between 4 percent and minus 25 percent. Banks with CAR level above 4 percent are placed in the "A" category, considered as sound.

Banks with a CAR level below minus 25 percent are put in the "C" category, and may face liquidation if their owners are unable to inject cash to upgrade the condition. (02)