JAKARTA (TheInsiderStories) - The Banten regional government finally injects fresh funds Rp1.5 trillion (US$103.45 million) in capital into PT Bank Pembangunan Daerah Banten Tbk (IDX: BEKS), which was experiencing liquidity problems. This plan was agreed by the Regional House of Representatives on Tuesday (07/20).
According to the governor of Banten, Wahidin Halim, the capital injection will be carried out through the equity participation in Banten Global Development, as the bank’ shareholder. With the injection, the authorized capital of the holding company will raise to Rp3.30 trillion from initially Rp1.3 trillion.
The regional government will also convert the Regional General Cash Account worth of Rp1.55 trillion as a capital deposit to the local lender. After the law has been passed, the additional capital will be received by Bank Banten in the fourth quarter of 2020.
Before the provincial government’ capital participation plan was approved by the parliament, one of the proposed options was the placement of funds from the Deposit Insurance Corporation. The bank had previously failed to meet its obligations to channel tax-sharing funds and to accelerate the distribution of social safety net funds for people affected by COVID-19.
The value of each fund that must be channeled Rp890.22 billion. However, up to April 21, 2020, according to Wahidin, the funds had not been distributed. The rescue option through the agency was revealed in the governor’ written answer to the Banten regional House on July 14.
Earlier in front of lawmakers, Wahidin stated that Bank Banten had been designated as a bank under special supervision by the Financial Services Authority. The basic problem facing by the lender is the liquidity crisis, he said.
In the disclosure of information on the Indonesia Stock Exchange, Director of Bank Banten, Fahmi Bagus Mahesa said, the process of saving the bank continued. He said he had received information regarding the plan to increase the company’s capital by the Banten regional government through the issuance of new shares with the right to pre-order securities.
“We are also still exploring the merger plan as stated in the letter of intent that has been invented by the Governor of Banten and West Java on April 23, 2020 while preparing what is permissible in accordance with applicable laws and regulations,” Fahmi wrote to the authority.
He said, Bank Banten had carried out the rights issue process on March 31, 2020 but with the COVID-19 pandemic the plan was postponed. He added, “The company is currently preparing an adjustment schedule for the implementation of the rights issue.”
The initial establishment of Bank Banten was named PT Executive International Bank on Sept. 11, 1992 and began operating as a commercial bank in Jakarta on August 9, 1993. Then changed its name to PT Bank Executive International on January 16, 1996.
When the condition of the bank collapsed, Bank Indonesia asked the owner of the Executive Bank, Widjaja’ Family, to strengthen the capital structure. Then, Recapital Group, a company owned by Sandiaga Salahuddin Uno and Rosan P. Roeslani replacing the Widjaja Family position as controller at the bank.
The companys name was changed to Bank Pundi. After that, in 2016 the bank was sold to the Banten provincial government through Banten Global Development. After becoming a controlling shareholder, the bank changed its name to Bank Banten.
US$1: Rp14,500
Written by Editorial Staff, Email: theinsiderstories@gmail.com
