JAKARTA, April 3 The Indonesian government is
prepared to sell Bank Mutiara Tbk for less than the
2008 bailout cost to ensure it meets its year-end deadline, the
head of the state deposit agency said on Thursday.
The government spent an estimated 6.7 trillion rupiah
($593.31 million) at the height of the global financial crisis
to rescue what was then called Bank Century and prevent what
officials feared could be broader damage to the country's
"We can sell it for less than the bailout if the incoming
bids do not meet the target," Deposit Insurance Agency head
Kartika Wirjoatmodjo told reporters. By law, the bank has to be
sold by the end of the year.
At least seven investors, mostly foreign banks and private
equity firms, have expressed interest in buying a majority stake
in Mutiara, including from Japan, China and Malaysia, he said.
He gave no details.
Mutiara is excluded from the 40 percent cap on foreign
ownership of local banks which last year scuppered the drawn-out
attempt by Singapore's DBS Group Holdings to take over
PT Bank Danamon.
Last year, Bank Indonesia instructed the deposit agency to
inject 1.25 trillion rupiah to lift Mutiara's capital adequacy
ratio to 14 percent due to rising non-performing loans.
Preliminary bids will start in May and the deal should be
closed before Nov. 20.
The bank's 2008 bailout continues to shake the political
establishment with accusations flying that top officials and
politicians diverted large chunks of the rescue money. The
anti-corruption agency is investigating the issue.
Southeast Asia's biggest economy, backed by growing middle
class consumers, has generated interest from foreign banks as
the country offers high interest margins compared with
Japan's Sumitomo Mitsui Banking Corporation and
South Korea's Woori Bank had won regulatory
approvals to acquire Bank Tabungan Pensiunan Nasional Tbk
and small size Bank Himpunan Saudara,
($1 = 11,292.5 rupiah)
(Reporting by Fathiyah Dahrul; Editing by Jonathan Thatcher and