Temasek, Deutsche Bank consortium wins Danamon stake
Temasek, Deutsche Bank consortium wins Danamon stake
M. Taufiqurrahman and Dadan Wijaksana, The Jakarta Post,
Jakarta
A consortium of Temasek Holdings Pte. Ltd. and Deutsche Bank is
set to become the new owner of Bank Danamon after it won an
auction on Monday for a 51 percent stake in the bank.
Temasek Holdings is an investment subsidiary of the Singapore
government.
Chairman of the Indonesian Bank Restructuring Agency (IBRA)
Syafruddin Temenggung said that the consortium, called Asia
Financial Indonesia, made a price offer of Rp 1,202 (14 U.S.
cents) per share, compared to the agency's floor price of Rp
1,160 per share.
Syafruddin said the consortium would have to undergo a two-
week fit and proper test by the central bank before it officially
becomes the new owner of publicly listed Bank Danamon, which is
one of the country's top ten banks.
"If IBRA agrees with the fit and proper test from the central
bank, the consortium will then be designated as the new owner of
the bank, following a sale and purchase agreement," he said.
Based on the offered price, IBRA estimates that the 51 percent
stake could generate about Rp 3 trillion in proceeds, Syafruddin
said.
The agency is hoping to raise a total of $500 million selling
the Bank Danamon stake. Syafruddin said IBRA planned to
immediately sell another 20 percent stake through the stock
market.
The cash-strapped government has said the proceeds would go
into the government's coffers to be used partly to cover this
year's state budget deficit, estimated at Rp 34.4 trillion, or
1.8 percent of the country's gross domestic product (GDP).
What's more important, however, is the smooth-going of the
sale process, which should send positive signals to foreign
investors that the country is committed to economic reform
programs.
Selling local banks such as Danamon to credible foreign
investors should also fit in perfectly with the government's
efforts to restructure the country's troubled banking sector,
which is still feeling the pinch of the late 1990s economic
crisis.
Last year, the government sold Bank Central Asia and Bank
Niaga for the same reasons.
Danamon's shares closed on Monday 5.5 percent lower at Rp
1,300, before IBRA's announcement.
The government, through IBRA, owns 99.36 percent of Danamon.
IBRA took over Bank Danamon in the late 1990s after bailing
the bank out at a huge cost of Rp 47 trillion. The bank was
previously owned by tycoon Usman Admadjaja.
The Temasek-Deutsche Bank consortium beat a local consortium
of Bank Mega and PT Bhakti Capital Indonesia. Another consortium,
led by Ban Artha Graha, did not submit its final bid.
The new Temasek investment marks the growing role of Singapore
government-linked companies in the Indonesian corporate sector.
Singapore Technologies Telemedia Pte. Ltd. acquired a 49
percent stake in the state-owned telecommunications firm PT
Indosat late last year.
Singapore Telecommunications Ltd., the city state's biggest
phone company, owns a 35 percent stake in Indonesia's largest
mobile phone company PT Telkomsel.
Temasek spokeswoman Eva Ho told Dow Jones that the Singaporean
investment company has a 85 percent share of the joint venture
with Deutsche Bank, which made the bid for Bank Danamon.
Financial Performance
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Indicator As of March, 2003
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Net Profit Rp 269.7 billion
Gross Income Rp 1.9 trillion
Liabilities Rp 42.3 trillion
Total Assets Rp 47.2 trillion
Book Value (per share) Rp 1,003
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Source: Danamon's quarterly financial report