Government Prepares To Sell Bank Mutiara For Less Than Bailout

News: Indonesia's government is ready to sell Bank Mutiara for less than the 2008 bailout cost to meet its year-end deadline, according to Deposit Insurance Agency CEO Kartika Wirjoatmodjo (Reuters). By law, the lender has to be sold by end 2014. The state spent an approximate IDR6.7trn (US$593.31mn) to rescue the bank during the 2008 financial crisis. Around seven investors, mostly foreign lenders and private equity companies, from countries including Japan, China and Malaysia, have expressed interest to buy a majority stake in Mutiara, according to Wirjoatmodjo. Mutiara is excluded from the 40% limit on foreign ownership of local lenders. In 2013, Bank Indonesia ordered the deposit agency to inject IDR1.25trn (US$110mn) to lift the bank's capital adequacy ratio to 14% due to growing non-performing loans. Preliminary bids will commence in May 2014 and the deal is expected be closed before November 20 2014.

Government Prepares To Sell Bank Mutiara For Less Than Bailout

News: Indonesia's government is ready to sell Bank Mutiara for less than the 2008 bailout cost to meet its year-end deadline, according to Deposit Insurance Agency CEO Kartika Wirjoatmodjo (Reuters). By law, the lender has to be sold by end 2014. The state spent an approximate IDR6.7trn (US$593.31mn) to rescue the bank during the 2008 financial crisis. Around seven investors, mostly foreign lenders and private equity companies, from countries including Japan, China and Malaysia, have expressed interest to buy a majority stake in Mutiara, according to Wirjoatmodjo. Mutiara is excluded from the 40% limit on foreign ownership of local lenders. In 2013, Bank Indonesia ordered the deposit agency to inject IDR1.25trn (US$110mn) to lift the bank's capital adequacy ratio to 14% due to growing non-performing loans. Preliminary bids will commence in May 2014 and the deal is expected be closed before November 20 2014.

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