Stanchart-Astra preferred bidder for Bank Permata
Tony Hotland, The Jakarta Post/Jakarta
After a month-long due diligence process, a consortium of British Standard Chartered Plc. (Stanchart) bank and local automotive company PT Astra International were selected on Friday as the preferred bidder for the government's 51 percent stake in publicly listed Bank Permata, the country's seventh largest bank in terms of assets.
"The consortium of Stanchart and Astra was selected after scoring the highest in many categories, including business plans and offering price," Minister of Finance Boediono said.
He added that the price offered by the consortium was well above the average recorded for previous bank divestment, even on a global scale.
The consortium's offering valued the bank at 3.18 times its Dec. 2003 book value -- the equivalent of 2.73 times its June 2004 value -- yielding gross proceeds of Rp 2.77 trillion (about US$304.73 million), higher than the government's target of around $250 million.
The government, which owns a 97.17 stake in Permata and plans to sell another 20 percent stake to public investors next year, wishes to use the proceeds from the sales to help cover the 2004 state budget deficit.
Stanchart-Astra outbid three shortlisted bidders that also submitted their final bids on Thursday. They were a consortium of Malaysia-based Malayan Banking Bhd. and state pension operator PT Jamsostek; a consortium of Bank Panin and Australia and New Zealand-based ANZ Ltd.; and Malaysia's Commerce Asset-Holding Bhd., which teamed up with local Bank Bumiputera.
Singapore's United Overseas Bank (UOB) did not submit a final bid.
The winning partnership has vowed to strengthen Permata's main business in consumer banking and mix it with Astra's financing business.
It also reportedly plans to keep the ownership of the acquired shares for at least as long as 10 years.
Stanchart's victory is the first for the London-based bank after its two previous attempts to acquire an Indonesian bank failed.
The foreign bank, whose assets and capital stood at $129 billion and $14.6 billion respectively in June, tried to buy Bank Bali in 1999 but failed due to protests from local workers refusing to be taken over by a foreign bank.
It lost to a U.S. hedge fund for a 52 percent stake in Bank Central Asia in 2002.
Analysts have said that acquiring Permata makes business sense for Stanchart, established in 1863, as it obtains around two- thirds of its profits from Asian operations. The bank now has 12 branches in Indonesia and offices in five major cities with 1,000 staff serving over 100,000 customers.
Astra, the country's largest automotive producer, is 41.94 percent owned by Mauritius' Cycle & Carriage Ltd. Astra's previous banking arm, Bank Universal, merged to become part of Permata in 2002 together with Bank Bali and three other banks.
The consortium will later attend a test of suitability by the central bank before being declared the winner. If it fails, the consortium that scored the second highest will be considered.
Both Stanchart and Astra will each share a 25.5 percent stake.
The government has been selling its shares in local banks in a bid to recoup billions of dollars worth of funds injected into the troubled industry during the late 1990s financial crisis.
Permata's financial reports as of Sept. 2004: (unaudited)
Sept. 30, 2004 Sept. 30, 2003
Net profit Rp 488.7 billion Rp 214.4 billion Equity Rp 2.2 trillion Rp 1.3 trillion Assets Rp 31.4 trillion Rp 27.4 trillion Outstanding loans Rp 13.2 trillion Rp 9.1 trillion Third-party funds Rp 25.6 trillion Rp 23.4 trillion Capital adequacy ratio (CAR) 12.0 % 10.1 % Net non-performing loans(NPL) 1.9 % 3.5 % Loan to deposit ratio (LDR) 52.0 % 40.7 %
Source: Bank Permata