The Indonesian Bank Restructuring Agency (Ibra) is announcing a plan for divesting up to 71% of its shares in PT Bank Danamon Indonesia Tbk (BDI). Ibra intends to divest 51% of BDI through a strategic sale and a maximum of 20% through a market placement.
The following table summarises the next steps in the strategic sale process:
- Distribution of overview document and confidentiality agreement commences at week IV-January 2003;
- Bidder registration submission period of letter of interest (LoI) and execution of the CA at Week IV January until Week II February 2003;
- Distribution of information memorandum commences at week I, February 2003;
- Preliminary non-binding bids due at week III, February 2003;
- Announcement of the shortlisted bidders at week III, February 2003;
- Due diligence for shortlisted investors commences at week IV, February 2003;
- Final binding bids due at week IV, March 2003;
- Announcement of preferred bidder at week IV, March 2003;
- Fit and proper test process at week IV, March until week II, April 2003;
- Negotiation of sales and purchase agreement and closing at week II, April until Week IV, April 2003.
Ibra reserves the right to alter the schedule whenever it sees the needs to do so in accordance with the developments of divestment process without any prior notification.
Following the announcement, Ibra through its advisers will commence distribution of the overview document and confidentiality agreement to potential investors.
Specifically, the investor must satisfy the following criteria:
- Bank that is acceptable to Indonesian law and regulations; if in the form of a consortium, its leading investor has to be a bank.
- Sound financial performance as proven by its financial statements and legitimate source of funds.
- Pass the fit and proper test conducted by Bank Indonesia.
- Authorised to purchase shares of BDI as stipulated in the policy of KKSK NoKEP03/KKSK/11/2000 dated
November 10, 2000.
- Committed to BDI, Indonesian banking industry and Indonesia’s national interests.
- Purchase price and terms and conditions acceptable to Ibra.
An investor road show for divestment of Ibra’s share in BDI will be conducted in February 2003.
Ibra intends to initiate the market placement in parallel with the strategic sale. Such market placement will be implemented separately via the direct placement of shares of up to 20% through capital market as Ibra sees fit.
Following the completion of its merger and integration with nine banks in 1999 and 2000, BDI has started to record net profits since 2000 after previously incurring net losses due to the economic crisis. Based on BDI’s consolidated financial statements (unaudited) as of September 30, 2002, it recorded a net income of Rp725bn. BDI’s assets as of September 30, 2002 totalled Rp54,297tn with a capital adequacy ratio (CAR) of 27.4%.
BDI has also successfully reduced its non-performing loans from 8.6% as of
In addition, BDI has grown its loan portfolio, primarily to retail or consumer and SME segments.
BDI’s success in the consumer segment has been partly due to its ability to develop and introduce innovative products. Prima Investa, a mutual fund which invests in BDI’s recapitalisation bonds, and Fix”N”Fast, a fixed installment credit card, are examples of such products specifically geared to the consumer market.