Two consortia to compete for Niaga stake

Dadan Wijaksana, The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) named on Monday two consortia, led each by ANZ Banking Group Ltd. and Malaysian financial group Commerce Asset-Holdings Bhd., as the qualified bidders for the government's 51 percent stake in Bank Niaga.

But IBRA chairman Syafruddin Temenggung said during a news conference that the winning bidder would be decided by State Minister of State Enterprises Laksamana Sukardi, who oversees the agency.

The two consortia submitted their final bids by the final Monday deadline, but IBRA declined to disclose the offers.

The agency had short-listed four consortia to go to the final bidding round, but two other local consortia, each led by Batavia Investment Management and Bank Victoria International, failed to complete the process.

Batavia failed to attach the documents necessary for a fit-and-proper test, while Bank Victoria failed to submit its final bid altogether, Syafruddin said.

While ANZ is partnered with local Panin Bank, Commerce Asset- Holdings, which owns Malaysia's third largest banking group Bumiputera-Commerce, has reportedly teamed up with a company owned by Robby Djohan, the former president of Bank Niaga.

Syafruddin, however, did not say whether the government would proceed with the sale of the mid-sized bank if the accepted bids were too low compared to the publicly listed bank's current market price of Rp 80 per share.

He told the media last week that the agency would cancel the plan if the final bids were not favorable.

Reports earlier said that preliminary bids submitted by the bidders were only between Rp 15 and Rp 25 per share.

The sale of the government stake in Bank Niaga is part of the country's economic reform program agreed with the International Monetary Fund (IMF).

The proceeds from the divestment program should help finance the 2002 state budget deficit. IBRA is targeted to raise more than Rp 35 trillion in cash this year.

The IMF has warned the government not to delay the sale of Bank Niaga.

The financial market has been waiting for the sale, which is expected to give a further boost to the rupiah.

IBRA controls a 97.15 percent stake in Bank Niaga, which was bailed out by the government in the late 1990s.

Elsewhere, Syafruddin said that he would suggest to Laksamana that he consider three things when deciding on the acceptable bidding price for the Bank Niaga stake.

"First, Niaga is considered a healthy bank, as evidenced by its solid performance in the first quarter," he said.

The bank managed to post Rp 57 billion in net profit at the end of March, compared to Rp 23 billion recorded in the same period last year.

The bank's non-performing loans (NPLs) were reduced from 25 percent last year to 8.2 percent.

"Second, as Niaga is a publicly listed company, the selling price should be based on the market price.

"Third, a premium price should be determined in a selling process that involves majority ownership," he said, adding that the premium price should hover at 10 percent to 30 percent above the market price.