S'pore's DBS Group may bid for 51% stake in Danamon
S'pore's DBS Group may bid for 51% stake in Danamon
Bloomberg, Jakarta
DBS Group Holdings Ltd.,Southeast Asia's biggest bank, may bid
for the 51 percent stake Indonesia is selling in PT Bank Danamon,
the nation's fifth-largest lender, an Indonesian government
official said.
The Singapore lender is one of 70 potential foreign and local
investors invited by J.P. Morgan Chase & Co., the investment bank
advising the government on the stake sale, to bid for Bank
Danamon. Others include Standard Chartered Plc, HSBC Holdings Plc
and Australia & New Zealand Banking Group Ltd.
"It has submitted a letter of interest," I Nyoman Sender,
deputy chairman of the Indonesian Bank Restructuring Agency
(IBRA) said.
"We prefer banks to other financial institutions" in selling
the stake, he said.
IBRA would raise Rp 3.5 trillion (US$399.1 million) from
the stake sale at current market prices. Danamon is one of seven
banks Indonesia plans to sell this year, as it tries to raise
funds to help plug a Rp 34.4 trillion budget deficit and meet
pledges made to the International Monetary Fund in return for
$4.7 billion of loans.
In Singapore, DBS Group declined to comment. "We don't comment
on speculation," spokeswoman Julie Yeo said.
IBRA, which delayed the sale from last year, owns 99.4 percent
of Danamon. The agency also plans to sell a 20-percent stake on
the stock market.
Bank Danamon shares rose Rp 20, or 7.7 percent, to Rp 280 at
close of trading on the Jakarta Stock Exchange. The shares have
risen 3.6 percent in the past year.
Indonesia's government seized 11 of the country's 12 largest
banks and injected almost $40 billion worth of interest-bearing
government bonds to give them a source of income after the
rupiah's devaluation in 1997-1998 left most local companies
unable to pay loans.
ANZ Bank, Australia's fourth-largest lender, last year
dropped out of the race to buy Indonesia's PT Bank Niaga after
its initial bid was rejected as too low. Commerce-Asset Holdings
Bhd., Malaysia's No. 2 bank, was the only bidder for Niaga,
offering Rp 1.057 trillion for a majority stake.
"We remain interested in acquiring banking assets in
Indonesia at a reasonable price and at low risk," Paul Edwards,
spokesman for Australia's fourth-largest lender, said by e-mail.
"It's too early to comment on whether we have a specific
interest in Bank Danamon although it seems unlikely at this
stage."
Indonesia also plans to sell PT Bank Lippo, the seventh-
largest lender by market value, PT Bank Mandiri, the country's
biggest lender by assets, and PT Bank Negara Indonesia, the
largest publicly traded lender. It may also sell PT Bank Rakyat
Indonesia, PT Bank Permata and Bank International Indonesia.
The asset disposals may be hampered by a shrinking economy
and waning investor confidence after an Oct. 12 bomb blast in
Bali killed at least 190 people, mostly Australian tourists.
Foreign investment fell 35 percent to $9.7 billion last year,
the lowest in nine years.
ANZ Bank's continued interest in Indonesian assets is
encouraging against that backdrop, said Tjandra Lienandjaja, an
analyst at G.K. Goh Securities, a local brokerage.
"If it goes ahead, it will help expand its retail business
in the region," he said.