TPG, Northstar, Boy Thohir Seeks Buyer for BFI Finance Shares

Photo by BFI Finance

JAKARTA (TheInsiderStories) – Trinugraha Capital & Co, a investors’ consortium led by TPG Capital, Northstar Equity Partners and Trinugraha Capital SA reportedly intends to sell its ownership of shares in financing firm PT BFI Finance Indonesia (IDX: BFIN). Trinugraha Capital happens to be a financial company established in Luxemburg.

Source stated the shareholders have appointed an advisor for the 43 percent share sale action. Note that the multi-finance provider’s shares have soared 86 percent in value over the past year.

The value of the transaction is estimated to reach Rp 3.8 trillion (US$285.71 million), and the action has attracted interest from a number of potential investors from Japan and South Korea.

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

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.

BFI Finance is 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 PT Wahana Ottomitra Multiartha, widely known as PT WOM Finance Tbk (IDX: WOMF), in 1997.

Thohir’s strong interest in BFI Finance is encouraged by promising macro-economy prospects for Indonesia’s consumer financing industry in Indonesia. At the moment, BFI Finance is being operated by an experienced management team, and happens to be the largest independent player in this sector.

Thohir expects his long experience in this sector may yield his best contribution to the company. With regard to the acquisition of the shares, Thohir will hold a representative chair position on BFI’s Board of Directors. The required approval will be bestowed during the next general meeting of shareholders.

Boy 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).

In the first half (1H) of 2017, BFI Finance posted positive performance. Net receivables increased by almost 28 percent, to Rp13 trillion. 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, and there are improvements in business conditions in regions of Sumatra and Kalimantan previously suffering from a decline in performance.

BFI Finance in 1H of 2017 managed to distribute new financing of Rp6.7 trillion, growing 30 percent compared with the same period last year (Rp5.2 trillion). Thus, managed receivables rose 15 percent to Rp14.5 trillion at the end of June 2017, compared to Rp12.6 trillion last year.

The 35-year-old finance company consistently managed to increase its assets and its profitability in the first half by posting a net profit increase of 55 percent, reaching Rp526 billion, compared to Rp340 billion last year, supported by an increase in total income. As a result, the ratio of non-performing finance receivables (was recorded at just 1.1 percent, after 1.5 percent over the same period the previous year.

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.

As of June 2017, BFI Finance operates 316 outlets throughout Indonesia, with the 52 percent in Java and Bali, followed by Sumatra, Sulawesi and East Indonesia, respectively, at 19 percent each.

BFI Finance was established in 1982 as PT Manufacturer Hanover Leasing Indonesia, a joint venture between Hanover Leasing Corporation of the United States with local shareholders. The company went public in May 1990 with the BFIN stock code.

After carrying out a debt restructuring process following the 1998 financial crisis, the company was officially renamed PT BFI Finance Indonesia Tbk in 2001. Currently, 42.8 percent of BFI Finance shares are owned by the Trinugraha Capital consortium. The remainder is in the hands of local and international institutional shareholders, as well as public shareholders.

BFI’s business activities consist of motor vehicle financing, heavy equipment, trucks and machinery, houses and shophouses, as well as financing for procurement of goods and services. The Company’s current business activities are mostly focused on the financing of used four-wheeled vehicles.

Writing by Linda Silaen, Emaii: