Foreign Investors After BFI Finance’s Shares

JAKARTA (TheInsiderStories)—Foreign investors competing to get Indonesian multi finance firm PT BFI finance Tbk (IDX: BFIN) shares, said sources close to the deal. The deals is estimated to be worth Rp3.8 trillion (US$275.36 million).

Our sources said, U.S’s private equity firm Warburg Pincus, Hong Kong-based Baring Private Equity Asia, Taiwan’s Cathay Financial Holding Co. and South Korea’s Shinhan Financial Group Co. are among bidders are vying on of a TPG Capital & Northstar Equity Partners-backed company.

The deals its expected to be finalized in this semester. Garibaldi Thohir, founder of investment firm Trinugraha Capital, denied to comment when TheInsiderStories try to get confirmation on the deals.

Trinugraha Capital & Co, an investors’ consortium led by TPG, Northstar and Trinugraha Capital SA reportedly intends to sell its ownership of shares in the financing arms. Trinugraha Capital happens to be a financial company established in Luxemburg.

BFI Finance was set up in 1982 as PT Manufacturer Hanover Leasing Indonesia, a joint venture between Manufacturer Hanover Leasing Corporation from the United States and local partners. After the Asian Financial Crisis, the company officially changed its name to PT BFI Finance Indonesia Tbk in 2001.

Today, the financial firm is 42.8 percent owned by the consortium of Trinugraha Capital. Remaining shares are held by local and foreign institutional shareholders, as well as retail shareholders.

The investors entered BFI Finance in 2011 under a consortium led by Thohir. The transaction value of share purchase was Rp1.44 trillion at that time.

Currently, Thohir is the President Director of PT Adaro Energy Tbk (IDX: ADRO), Indonesia’s second-largest coal mining firm. He also serves as President Director of PT Trinugraha Thohir, President Director of PT Surya Eka Perkasa Tbk (IDX: ESSA), President Director of PT Padangbara Sukses Makmur and President Commissioner of PT Wahana Ottomitra Multiartha Tbk (IDX: WOMF).

BFI’s business consists of the financing of vehicles, heavy equipment, trucks and machineries, housing and shops, as well as financing for procurement of goods and services. Most of our business today is focused on the financing of used four wheelers.

BFI has the largest distribution network in the country, with 218 branches and 124 kiosks spread across 33 of Indonesia’s 34 provinces, and supported by over 9.000 employees (as of Dec. 31, 2017).

The company is one of Indonesia’s largest independent multi-finance company, specializing in credit for automotive, motorcycle and heavy equipment. This particular transaction is Thohir’s second investment, after founding Wahana Ottomitra Multiartha in 1997.

The challenges facing the vehicle finance industry since last year have tended to subside. Although economic growth is still slow and the purchasing power of the public has not fully recovered, banking liquidity has shown improvement.

To support business growth, BFI Finance continues to strengthen its infrastructure, including its business network, to improve services to customers and business partners. The number of registered customers increased 22 percent, this increase was accompanied by improved service and networks.

TPG Capital is one of the global investment units of TPG, established in 1992 with total assets reaching $48 billion. In the meantime, Northstar Equity Partners is a financial investment company founded by Patrick Walujo, focusing on Indonesia.

Data from OICA, an international organization of motor vehicle manufacturers, showed that passenger car sales in Indonesia in 2016 grew nearly 11 percent  from a year earlier. Research and consulting firm Frost & Sullivan expects Indonesia’s vehicle sales to top 1.1 million this year.