Three consortia compete for Danamon

Dadan Wijaksana, The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) shortlisted on Friday three bidders who are competing for a majority stake in Bank Danamon, with the agency targeting to name the winning bidder in May.

The three bidders are the Asia Financial Indonesia consortium, the Bank Artha Graha consortium and the Bhakti Capital Indonesia consortium, IBRA chairman Syafruddin Temmenggung said.

Syafruddin added that the last two consortia were comprised of local bidders, while the Asia Financial Indonesia consortium consisted of Temasek Holdings of Singapore and Deutsche Bank.

IBRA plans to sell a 51 percent stake in the country's second largest private bank as part of its efforts to restructure the banking industry, and to raise funds to help finance the state budget deficit.

The divestment of government shares in private banks is aimed at luring credible investors, who could, in turn, help improve the banks' performance and revive the banking sector's intermediary role.

In addition, revenues from the share sales are intended to help finance the 2002 state budget deficit, projected at Rp 34.4 trillion, or 1.7 percent of the country's gross domestic product.

IBRA gained a 99.4 percent stake in Bank Danamon in return for the Rp 47 trillion it injected into the bank to bail it out in the wake of the 1997-98 banking crisis. The public holds the remaining shares.

The three bidders will have about a month to conduct due diligence on the bank before making their final bids, expected by the end of April.