Tirtamas sells 30 percent share in Bank Niaga

JAKARTA (JP): The Tirtamas Group has sold a 30 percent share in publicly listed Bank Niaga to a group of institutional investors as part of a consolidation process.

Public relations manager Jannus Hutapea said Friday in a media statement that the group's financial arm, Tunasmas Panduarta, retained a 10 percent stake in the large-size bank.

"The resulting structure will see Bank Niaga with a diverse shareholding base, with no single dominant controlling shareholder," he said. He added the share placement will be coordinated by Lippo Securities.

Jannus said the sale was made in order to put Bank Niaga and its depositors in a stronger position to benefit from the involvement of a diversified group of Indonesian and international investors.

The diversified Tirtamas is controlled by Hashim Djojohadikusumo, a brother of the son-in-law of former president Soeharto, Lt. Gen. Prabowo Subianto, who was discharged from the military recently due to his implication in the abduction of political activists.

Hashim surprised the local financial community in July last year, at the beginning of the crisis, by buying a 10 percent stake in Bank Niaga through a public tender offer on the Jakarta Stock Exchange.

He subsequently announced that he would buy another 40 percent stake from the Tahija Family.

The plan was not fully realized as the monetary crisis dragged on, with Hashim eventually adding only a 30 percent stake.

Based on the bank's 1997 financial report, the Tahija Family retains a 10.49 percent stake, local life insurer AJB Bumiputera 5 percent, Malaysia's RHB Bena Sdn. Bhd. 20 percent, and the investing public 24.57 percent.

The country's banking sector has been badly hit by the more than a year-old economic crisis, leading to 34 cash-strapped banks to fall under the supervision of the Indonesian Bank Restructuring Agency (IBRA), the closing of 26, and the nationalization of four others, including the country's two largest institutions, BCA and Bank Danamon.

Most of the ailing banks received massive liquidity support from the central bank. Bank Niaga is one of the banks still considered healthy.

The government is expected to complete the auditing process on the country's more than 200 commercial banks in October, before taking another action on banks which may not be able to fulfill the 4 percent minimum capital adequacy ratio by the end of this year.

Bank Niaga's president Gunarni Suworo recently said that the bank was expected to have a net loss in the first quarter of this year against a net profit of Rp 31.81 billion over the corresponding period last year.

She said the downturn was due to the increase in the loan-loss provision to Rp 39.8 billion. (rei)