PPA says 32 investors vying for Permata

Rendi A. Witular Jakarta

Some 32 strategic local and overseas investors are expected to join the tender for a controlling stake in Bank Permata, the country's seventh largest lender in terms of assets, an official said.

President director of government asset management firm PT Pengelola Aset (PPA) Mohammad Syahrial said the 32 investors consisted of 20 foreign and 12 local investors, 90 percent of which were banks or financial consortia and the remaining were investment firms.

"Thus far, we have around 32 strategic investors that have expressed serious interest in the Permata stake," Syahrial told reporters after attending a PPA investor forum on Thursday.

The government, which has a 97.17 percent stake in publicly listed Permata, plans to sell 71 percent of its stake later this year to raise cash to help finance the state budget deficit.

However, the government has yet to decide whether it will sell the 71 percent stake to strategic investors, or sell a part of the shares to investors in the stock market.

Syahrial said that the strategic investors had asked the government to sell the whole 71 percent.

PPA is scheduled to hold a road show in Singapore, Malaysia, Hong Kong and United Kingdom next week to market the Permata stake.

The shares are currently under the management of PPA, a new entity under the auspices of the Ministry of Finance which was set up to manage assets previously handled by the now-defunct Indonesian Bank Restructuring Agency (IBRA).

Meanwhile, State Minister for State Enterprises Laksamana Sukardi was optimistic that the price for the Permata stake would be more than 1.8 times its book value because the bank is the government's last asset sale for this year, with more investors joining the bidding as they would not want to miss the opportunity.

The government, which is expected to reap around Rp 3 trillion from the Permata sale, has extended its schedule to announce the winner of the bid to December from November, due to the elections.

Laksamana also said that the government would coordinate with the central bank to prevent those involved in a legal dispute over some Rp 546.5 billion (US$61 million) funds in Permata from buying the stake.

"We will work closely with Bank Indonesia to prevent those involved in the dispute from buying the stake," said Laksamana.

The case is linked to the 1999 Bank Bali scandal, in which the funds from Bank Bali were transferred to a firm called PT Era Giat Prima (EGP), owned by Djoko Tjandra. Djoko was accused of illegally acquiring the funds from Bank Bali, but the Supreme Court acquitted him of all criminal charges and called upon IBRA to return the funds to EGP.

Bank Bali and its assets were subsumed during the merger in 1999 to establish Permata, including the disputed Rp 456.5 billion funds.

IBRA, however, has refused to return the funds, as it would affect the financial condition of Permata. Djoko took the case to the State Administrative Court, which ruled in favor of IBRA, but the Supreme Court overturned the verdict in March.

Investors interested in joining the bid

1. Bank Mandiri 2. Bank Central Asia 3. Bank Rakyat Indonesia 4. Bank Danamon 5. Bank Panin 6. Bank Artha Graha 7. Bank Niaga 8. Bank Buana 9. Bank Multicor 10. PT Jamsostek 11. Temasek (Singapore) 12. Standard Chartered Bank (United Kingdom) 13. Maybank (Malaysia) 14. United Overseas Bank (Singapore)

Permata fact box

-- Bank Permata was set up in 1999, as a result of merger of five unhealthy banks -- Bank Bali, Bank Universal, Bank Arthamedia, Bank Prima Express and Bank Patriot.

-- In Indonesian Permata means jewel.

-- The bank has 303 branches all over the country with 457 automatic teller machines.

Financial performance and indicators

2004 (Q1)

Assets Rp 29.7 trillion Capital Rp 1.84 trillion Net interest revenue Rp 372 billion Net profit Rp 127 billion Non-performing loans (NPL) 8.34% Capital adequacy ratio (CAR) 12.84% Return on assets (ROA) 1.8% Return on equity (ROE) 39% Loan to deposit ratio (LDR) 44.4%