Merger of Surabaya, BPI bourses signed soon
JAKARTA (JP): Shareholders of PT Bursa Paralel Indonesia (BPI), the company managing the country's over-the-counter market, finally agreed in an extra-ordinary meeting yesterday on the merging of the firm with the Surabaya Stock Exchange (SSE).
BPI's president, Tito Sulistio said that over 70 percent of the company's 103 shareholders endorsed the merger plan with the Surabaya-based stock market.
"We are certain now the deal could be signed by the end of this month," he told newspeople following the meeting here.
He said that the merger plan, which has caused concern among BPI members -- especially regarding their future operations -- would be carried through "a semi-acquisition procedure".
Tito did not specify what he meant by the semi-acquisition process but according to Basiruddin A. Sarida, the president of the SSE said the planned deal would allow the Surabaya-based bourse to take over all assets and shares of BPI.
"We will take over the shares and assets of BPI at its book value of Rp 4.8 billion (US$2.18 million)," Basiruddin told newspeople after attending a seminar on financial and securities markets yesterday.
He said that the merger was earlier planned to be carried out through the consolidation of the two bourses' assets.
"But such a merger system was then replaced with an acquisition of assets and shares of BPI to clear technical problems hindering the merger plan," he said.
Tito said that BPI will no longer exist when the deal becomes effective later this month.
"BPI will be liquidated. Its ex-members and share issuers can automatically join the SSE," he said.
Liquidation
BPI was established late 1990 by the association of money and securities traders as the first over-the-counter market in the country, while the SSE was formed in 1989 as the first privately owned stock market and the only stock exchange located outside Jakarta.
The SSE is relatively more active than BPI but the SSE, which is located in the East Java capital city of Surabaya, has virtually failed to carry out its mission as the alternative source of finance for companies in the province.
The Surabaya market's early operation was much helped by the government's double listing policy, which required share issuers to cross-list their shares both in the Jakarta and Surabaya stock markets.
The abolishment of the double-listing policy following the privatization of the Jakarta stock market in 1992 almost jeopardized the Surabaya market until the government assisted by requesting share issuers to retain their cross listing.
However, trading on the parallel and Surabaya exchanges remain inactive as both investors and share issuers still prefer dealing with the Jakarta Stock Exchange.
Tito said the merger plan is not merely a unification of the two exchanges but more the redesigning of the country's capital market operation.
Unlike the Jakarta Stock Exchange, the merged stock exchange will target small and medium-scale companies, he said, adding the merged market would also act as a bridge for small-scale companies to get listed on the Jakarta market. (hen)