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NEWS UPDATES Asean Affairs        25 January 2011

Indonesia's Bank Mandiri to raise $1.3 Billion

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Bank Mandiri, Indonesia's biggest lender, is to raise Rp 11.69 trillion ($1.3 billion) in a rights issue, to be Indonesia's second-biggest rights offering.

The rights issue price indication of Rp 5,000 rupiah per share, just below the mid- point of the previously indicated Rp 4,000 to Rp 6,150 range, is a 9.1 percent discount to Mandiri's close on Monday of Rp 5,500.

The state-owned bank's capital raising will be the second biggest rights issue in Indonesian after Bakrie and Brothers raised about Rp 40 trillion in 2008.

However, it becomes the nation's biggest rights offering by a bank, beating an issue of Bank Negara Indonesia which raised Rp 10.46 trillion in December 2010.

Mandiri had planned to raise between Rp 13 trillion and Rp 14 trillion but dropped the size as investors drove the Jakarta stock market down more than 10 percent from its record high set early this month due to inflation worries.

Shares in Mandiri, which has a market capitalization of $12.8 billion, are down almost 15 percent so far this year, while the Jakarta index dropped 10.2 percent.

The bank will issue 2.34 billion new shares through a rights issue, diluting the government's stake to 60 percent.

The government portion will be sold in a placement and has been priced at an indicative Rp 5,150 to Rp 5,200, or a 5.5 to 6.4 percent discount to Monday's close. The price is subject to the approval of a shareholder meeting on Jan. 28.

Most of the capital raised would be used to fund loans while the rest would be used for acquisition opportunities in insurance firms, the bank has said.

The bank has picked Deutsche Bank and Bank of America Merrill Lynch as joint global coordinators for the offering, with CLSA Asia Pacific Market and Citibank as joint global bookrunners.

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This year in Thailand-what next?

04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

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