ASEAN KEY DESTINATIONS
Indonesia: Govt eyes strategic investors for state bank
Amid likely spiraling losses in the stock market, the government has initiated another option for selling strategic investors its stake in state-owned Bank Tabungan Negara (BTN), reported local daly the Jakarta Post.
Indonesian State Minister for State Enterprises Sofyan A Djalil said Friday selling stakes via an initial public offering (IPO) was unfavorable as the country's stock market remained jittery over the prospects for economic growth.
"We are still opening up options for selling shares to potential buyers. In a situation like this, an IPO will just be impossible," he said, adding the government stood to gain less by selling its stake on the stock market.
The government hopes to secure at least 2 trillion rupiah ($214 million) in proceeds from unloading the 35 percent stake in BTN with an IPO during the fourth quarter of this year.
The funds will be used for the company's expansion program.
A number of state-owned banks, including Bank Mandiri and Bank Negara Indonesia, have reportedly shown interest in buying the BTN stake.
However, recent turmoil in the market has made the government think twice about its plan, not only to sell BTN, but also steel producer PT Krakatau Steel, PT Perusahaan Perkebunan Nusantara (PTPN) III, PTPN IV and PTPN VII.
The Indonesia Composite Index tumbled to its lowest level in 17 months Tuesday, touching down at 1,885.04. Bloomberg reported the index has lost 30 percent in 2008 after a decline in commodity prices and on concern about global credit losses.
The House of Representatives' delay in approving the IPO plan early this year was regrettable, as the stock market was at its peak due to soaring global commodity prices, Sofyan added.
Commodity-heavy Indonesia has benefited from the boom, especially its state companies, which have large businesses in palm oil, cocoa and iron-ore.
The government is still waiting for the House to approve the IPO of Krakatau Steel.