Tirtamas to buy 50 percent of Bank Niaga

JAKARTA (JP): The widely diversified Tirtamas group announced yesterday plans to acquire 50 percent of publicly listed Bank Niaga for about Rp 756.24 billion (US$290.8 million).

Tirtamas chairman Hashim Djojohadikusumo said yesterday: "This is one of the biggest acquisitions in Indonesia this year."

Hashim said Tirtamas had reached an agreement with the Tahija family to buy their 40 percent stake in Bank Niaga and planned to buy another 10 percent through a public tender offer.

He said Tahija's wholly owned companies, PT Austindo Teguhjaya and PT Austindo Nusantara Jaya, would sell their 75.63 million shares in Bank Niaga or about 40 percent of the bank's total 189.08 million shares, at Rp 8,000 per share.

Tirtamas would buy another 10 percent, or 18.9 million shares, through a public tender offer at the same price, he said.

Bank Niaga is the sixth largest private bank in the country with total assets of Rp 7.9 trillion and market capitalization of Rp 1.3 trillion as of December, 1996. It's shares closed yesterday at Rp 7,750, up Rp 1,050 from Friday.

"We feel honored to have the Tahija family's trust. Tirtamas group will continue the successful business strategy and the rapid development experienced by Bank Niaga," Hashim said.

Bank Niaga will further strengthen Tirtamas group's financial service division. It holds equity stakes in Bank Papan Sejahtera (19.8 percent), Bank Pelita (100 percent), Bank Kredit Asia (100 percent), Merril Lynch Indonesia securities company (20 percent) and MetLife Sejahtera Insurance (34 percent).

Tirtamas is active in building materials (cement), oil and petrochemicals, international trading, agribusiness, financial services, coal mining and power generation.

"Through the transaction, Tirtamas group sees an opportunity to strengthen its position in the financial services industry to achieve critical economies of scale, and to be able to meet the challenges of globalization," said Hashim.

The acquisition will be carried through one of Tirtamas group's financial holding companies, PT Tunasmas Paduarta.

Bank Niaga's president commissioner Julius Tahija said his family would use the proceeds from the sale for business expansion.

"The decision to sell was difficult ... However, at this stage of the development of the family investment portfolio, we have concluded that we would rather focus our resources on our emerging activities which include power generation, insurance, mining, plantation development and fund management," said Tahija.

Julius Tahija became the controlling shareholder of Bank Niaga in 1972, when he bought 80 percent of the bank.

The bank grew through mergers with Bank Agung in Central Java in 1973, Bank Tabungan in Bandung in 1978 and Bank Amera in 1983. In 1974, it made an agreement with Citibank to strengthen its management training, systems and technology.

Bank Niaga has 62 branches in Indonesia, and offices in Los Angeles, the Cayman Islands and Hong Kong.

Its 1996 financial report shows that the Tahija family, through PT Austindo Teguh Jaya and PT Austindo Nusantara Jaya, own 42.3 percent of Bank Niaga. Other major shareholders include BIA Investment Ltd with 12.58 percent, Bumiputera life insurance company with 8.50 percent, Baring Far East Nominees Ltd with 6.42 percent and PT Artha Investa Argha with 5.79 percent.

Bank Niaga's joint ventures with foreign corporations include PT Bank Sumitomo Niaga, where it has 20 percent, PT BZW Niaga Securities (40 percent) and Cigna Niaga Life (40 percent).

The bank wholly owns PT Niaga Leasing, 99.99 percent of Niaga Finance Co Ltd, 79.65 percent of PT Saseka Gelora Finance, 99 percent of PT Niaga Asset Management and 53 percent of PT Niaga Factoring. (jsk)