JAKARTA (TheInsiderStories) – Indonesian medium lender, PT Bank Bukopin Tbk (IDX: BBKP) will sale 21 percent of its stake to the foreign strategic investor, through a right issue, Eko R. Gindo, its CEO told TheInsiderStories on Friday (29/06).
Our sources said, among the investor are South Korean Kookmin Bank and U.S’s CVC Capital Partner that already sign preliminary due diligence and non-disclosure agreement.
The company will sell 2.7 billion shares or around 30 percent, at an indicative price between Rp500 to Rp700, and will raise a total of Rp2 trillion to Rp 2.7 billion from the action.
According to him, the public company lender is currently waiting approval for that corporate action from Financial Service Authority (FSA), hopefully by the end of June. “By next week we will start to offer the stake,” he said.
Currently, miner company PT Bosowa Corporindo remain its the biggest shareholder by 30 percent, and Koperasi Pegawai Bulog Seluruh Indonesia (Kopelindo) by 18.09 percent and Indonesia government by 11.43 percent, and the rest 41 percent by the public.
The company aims to improve its capital adequacy ratio to 14 percent through its right issue, from 11.09 percent at 1Q 2018 (versus 13.48 percent in 1Q 2017). Yet, remain open to other option such as sub-debt to increase its CAR.
This right issue also will boost corporate capacity to expand its loan. As the end of the first quarter of 2018, the lender disbursed 71.8 trillion (rise 4.4 percent from 67.9 trillion Indonesia rupiah at 1Q 2017).
One of the effort to increase its loan disbursement is the flexy bill, the loan that was given to the company such as hotel and textile company to finance their electricity bill from PLN. So far the lender has disburse 200 billion flexy bill loan.
“Onething that I learn when I worked in the riil sector (Bosowa Corporindo) is that we will never postponed payment for the electricity bill, so it sure become a priority,” he added.
State-owned lender PT Bank Negara Indonesia Tbk (IDX: BBNI) was rumored to act as a standby buyer of a right issue of medium-sized lender affiliated with tycoon Aksa Mahmud’s conglomerate Bosowa Group, PT Bank Bukopin Tbk (IDX: BBKP)’s shares.
“We are still reviewing and exploring the financial statement of (Bukopin),” Vice President of BNI Herry Sidharta told TheInsiderStories on Thursday (03/05).
Bank Bukopin is planning to hold a rights issue in June to strengthen its capital and expand its business. According to sources close to the matter, four entities have shown interests in becoming standby buyers, including BBNI.
The four entities include a Hong Kong based private equity consortium, a consortium that has ties with one of the biggest bank in Asia, BBNI, and a private equity firm that once owned a bank.
Recently, Indonesian Financial Service Agency is scrutinizing Bukopin’s last year financial statement, due to an issue of financial record manipulation.
The company was suspected to providing misleading information related to the company’s financial statements. This include inaccuracies in reporting credit card receivables.
The financial statement discrepancies were responded negatively by investors with the decline in the price of the shares of the lender.
Bank Bukopin posted poor performance last year, with profit was down 54 percent to Rp112.37 billion (US$8.14 million) from Rp248.95 billion in 2016, driven by the bad performance of disbursed loans. The bank’s non-performing loans (NPL) gross increase to 8.54 percent from 3.77 percent.
By the end of 2017, the capital adequacy ratio fell to 10.51 percent from 11.37 per cent, while Return on assets only 0.09 per cent, below banking industry at 3 percent.
The bank is eyeing between 10 and 15 percent growth in profits this year as it expects loans to grow between 5 and 10 percent.
The company’s loan growth target for 2018 was 8 percent, citing political considerations resulting from the regional elections this year and general and presidential elections in 2019.
As of November 2017, Bank Bukopin had disbursed Rp. 70.17 trillion in loans, a 3.07 percent year-on-year (yoy) increase compared to the figure in 2016. It booked Rp. 723.01 billion in profits, down 30.38 percent from the figure in 2016.
Currently, Bosowa Corporindo, part of Aksa Mahmud’s Bosowa group, controls 30 percent of the shares in Bukopin. Kopelindo, the staff co-operative at state procurement agency by state-owned logistic firm Perum Bulog has 18.09 percent of the bank’s shares and the Indonesian government 11 percent. The remainder of the shares are publicly owned.