Monday, June 14, 2010
Bakrie Spin Off Infrastructure Unit Next Year
PT Bakrie & Brothers (BNBR.JK), the holding company for Indonesia's Bakrie family, said it plans to spin off its infrastructure unit with assets of $3 billion, in an initial public offering by early 2011.
Rajawali to list $1 billion plantation assets
Indonesian investment firm Rajawali Group plans to unlock over $1 billion worth of plantation assets through a market listing within a year, and then hunt for coal and gold mines in the country.
Rajawali, owned by Peter Sondakh, one of Indonesia's richest men, is famous among local investors for managing to unlock value by developing companies, and built up a $1.6 billion warchest from asset sales to expand in mining, plantations and property.
"Cash is king. If there are distressed assets we can jump in," Managing Director Darjoto Setyawan told Reuters in an interview on Friday, adding the firm was worried about the potential fallout from euro zone debt on credit liquidity.
The company plans to start planting its 200,000-hectare landbank with palm oil this year, for an investment of as much as $700 million. It has also bought 70,000 hectares in the planned Merauke food estate in Indonesia's eastern Papau province, in which it will invest $400 million to plant sugar.
Indonesia is the world's top producer of palm oil, largest thermal coal exporter, and Southeast Asia's biggest sugar buyer. "Indonesia is the biggest crude palm oil producer so the product is very strategic for us," said Setyawan, adding the company decided to invest in sugar due to high domestic demand.
It aims to list the plantation assets, which could be through an initial public offering or potentially a backdoor listing. It holds a majority stake in restaurant business Eatertainment (SMMT.JK), its only holding among listed Indonesian firms after it fully sold its stakes in cement maker PT Semen Gresik (SMGR.JK) and cigarette producer PT Bentoel International Investama (RMBA.JK) in the past year.
The company has appointed the country's largest lender PT Bank Mandiri (BMRI.JK) as its main bank to provide loans for the Papua food estate project.
GOLD, COAL AND RESORTS
The firm has secured a 35 percent stake in PT Tambang Batubara Bukit Asam's (PTBA.JK) Banko coal mine, because of its purchase of an 80 percent stake in a $1.3 billion railway project to transport coal from the mine in Sumatra island, he said.
Rajawali is now looking for further coal and gold assets, either as greenfield projects or through stakes in existing mines or listed firms. It is already the majority shareholder in UK-listed gold miner Archipelago (AR.L).
"We're also looking at more than 10 coal assets in Sumatra and Kalimantan," Setyawan said, as he sketched out calculations for the value of its Sumatran assets on a white board.
Apart from plantations and mining, the firm plans to buy a hotel in Morocco or Turkey to tap the European tourism market. It already owns hotels in Indonesia, Malaysia and Australia, and could spin off property assets with another IPO.
The moves to unlock value come as Sondakh, 58, plans to retire as CEO in two years, staying on as chairman to oversee Rajawali as a strategic holding firm for its listed businesses.
Setyawan, in an office filled with model airplanes, said the firm has no plans to take part in the planned IPOs of Indonesian flag carrier Garuda or state steel maker Krakatau Steel. Local stock market players often follow the lead of Rajawali, described as a "savvy investor" by CLSA in a recent report.
"Our business model is always to go for a greenfield project, develop it and then we can enjoy the harvest," Setyawan said. From Reuters, 11th June 2010.
Rajawali, owned by Peter Sondakh, one of Indonesia's richest men, is famous among local investors for managing to unlock value by developing companies, and built up a $1.6 billion warchest from asset sales to expand in mining, plantations and property.
"Cash is king. If there are distressed assets we can jump in," Managing Director Darjoto Setyawan told Reuters in an interview on Friday, adding the firm was worried about the potential fallout from euro zone debt on credit liquidity.
The company plans to start planting its 200,000-hectare landbank with palm oil this year, for an investment of as much as $700 million. It has also bought 70,000 hectares in the planned Merauke food estate in Indonesia's eastern Papau province, in which it will invest $400 million to plant sugar.
Indonesia is the world's top producer of palm oil, largest thermal coal exporter, and Southeast Asia's biggest sugar buyer. "Indonesia is the biggest crude palm oil producer so the product is very strategic for us," said Setyawan, adding the company decided to invest in sugar due to high domestic demand.
It aims to list the plantation assets, which could be through an initial public offering or potentially a backdoor listing. It holds a majority stake in restaurant business Eatertainment (SMMT.JK), its only holding among listed Indonesian firms after it fully sold its stakes in cement maker PT Semen Gresik (SMGR.JK) and cigarette producer PT Bentoel International Investama (RMBA.JK) in the past year.
The company has appointed the country's largest lender PT Bank Mandiri (BMRI.JK) as its main bank to provide loans for the Papua food estate project.
GOLD, COAL AND RESORTS
The firm has secured a 35 percent stake in PT Tambang Batubara Bukit Asam's (PTBA.JK) Banko coal mine, because of its purchase of an 80 percent stake in a $1.3 billion railway project to transport coal from the mine in Sumatra island, he said.
Rajawali is now looking for further coal and gold assets, either as greenfield projects or through stakes in existing mines or listed firms. It is already the majority shareholder in UK-listed gold miner Archipelago (AR.L).
"We're also looking at more than 10 coal assets in Sumatra and Kalimantan," Setyawan said, as he sketched out calculations for the value of its Sumatran assets on a white board.
Apart from plantations and mining, the firm plans to buy a hotel in Morocco or Turkey to tap the European tourism market. It already owns hotels in Indonesia, Malaysia and Australia, and could spin off property assets with another IPO.
The moves to unlock value come as Sondakh, 58, plans to retire as CEO in two years, staying on as chairman to oversee Rajawali as a strategic holding firm for its listed businesses.
Setyawan, in an office filled with model airplanes, said the firm has no plans to take part in the planned IPOs of Indonesian flag carrier Garuda or state steel maker Krakatau Steel. Local stock market players often follow the lead of Rajawali, described as a "savvy investor" by CLSA in a recent report.
"Our business model is always to go for a greenfield project, develop it and then we can enjoy the harvest," Setyawan said. From Reuters, 11th June 2010.
Tuesday, November 3, 2009
BANK RAKYAT INDONESIA POSTS STRONG GROWTH IN NET PROFIT IN JAN-SEPT
JAKARTA-
The net profit of Bank Rakyat Indonesia (BRI) (JSX:BBRI) shot up 25.1 per cent year-on-year to Rp5.3 trillion (US$570 million) in the first nine months of this year on strong growth of net interest income.
The state lender posted a 13.6 per cent rise in net interest income to Rp16.69 trillion thanks to a surge in credit expansion as against cost of fund of Rp9.05 trillion.
The bank posted a 26.9 per cent increase in outstanding credit by the end of the nine month period to Rp219.56 trillion.
A stronger increase of 96.14 per cent was recorded in fee based income and other operating income to Rp2.72 trillion, the newspaper Bisnis Indonesia reported.
BRI President Sofyan Basir said the bank posted an increase in net profit when its net interest margin was cut to 9.21 per cent from 10.61 per cent.
The net profit of Bank Rakyat Indonesia (BRI) (JSX:BBRI) shot up 25.1 per cent year-on-year to Rp5.3 trillion (US$570 million) in the first nine months of this year on strong growth of net interest income.
The state lender posted a 13.6 per cent rise in net interest income to Rp16.69 trillion thanks to a surge in credit expansion as against cost of fund of Rp9.05 trillion.
The bank posted a 26.9 per cent increase in outstanding credit by the end of the nine month period to Rp219.56 trillion.
A stronger increase of 96.14 per cent was recorded in fee based income and other operating income to Rp2.72 trillion, the newspaper Bisnis Indonesia reported.
BRI President Sofyan Basir said the bank posted an increase in net profit when its net interest margin was cut to 9.21 per cent from 10.61 per cent.
Friday, October 30, 2009
BANK RAKYAT INDONESIA HIKES ITS BOND VALUE TO US$321 MLN
JAKARTA-
PT Bank Rakyat Indonesia (BRI)(JSX:BBRI), a publicly traded lender, said it will raise the value of bonds it plans to issue to Rp3 trillion (US$321 million) from Rp2 trillion set earlier.
The state bank, however, is still awaiting a go ahead from the capital market watchdog Bapepam to issue the bond scheduled for next month or December.
BRI Director Abdul Salam said the improved condition of the market prompted the bank management to raise the value.
With the bond fund, BRI hoped to maintain a safe capital adequacy ratio at 15 per cent, Salam said.
In June BRI's CAR was 14 per cent and the level was believed to have declined with dividend paid to the government.
PT Bank Rakyat Indonesia (BRI)(JSX:BBRI), a publicly traded lender, said it will raise the value of bonds it plans to issue to Rp3 trillion (US$321 million) from Rp2 trillion set earlier.
The state bank, however, is still awaiting a go ahead from the capital market watchdog Bapepam to issue the bond scheduled for next month or December.
BRI Director Abdul Salam said the improved condition of the market prompted the bank management to raise the value.
With the bond fund, BRI hoped to maintain a safe capital adequacy ratio at 15 per cent, Salam said.
In June BRI's CAR was 14 per cent and the level was believed to have declined with dividend paid to the government.
Friday, October 23, 2009
Five Indonesian banks set to launch Islamic units
* BI says sharia units can become sharia banks in one month
* Revised law on VAT encouraging banks to set up sharia units
* Paper reports U.S. insurer looking at buying sharia bank
JAKARTA - Five Indonesian banks including Bank Central Asia (BBCA.JK), the No. 3 lender, expect to launch standalone sharia units next year, boosting the sharia market in the world's most populous Muslim nation, officials said.
Industry officials said the revised law on value added tax, which removed double taxation in the Islamic market, would encourage more banks to set up Islamic banking subsidiaries. The double taxation had made Islamic transactions more expensive than comparable conventional deals.
"We hope that it would be easier for us to expand business and seek strategic partners. We also hope to grow faster and attract investors from Middle East," said Barno Sudarwanto, head of planning and development at the sharia unit of Bank Negara Indonesia (BBNI.JK), the No. 4 bank, which will be spun off.
Others due to set up separate sharia banking units include mid-sized lenders Bank Panin (PNBN.JK), Bank Victoria (BVIC.JK) and unlisted Bank Jabar Banten.
Investor Daily newspaper on Friday reported that a U.S. insurance firm had met with central bank officials this week to discuss the possibility of buying an Islamic-compliant lender in Indonesia, without giving details.
Conventional banks typically set up their Islamic subsidiaries by first setting up Islamic banking departments and later on converting them into separate Islamic banks. Others, including BCA, may acquire smaller conventional banks and turn them into Islamic subsidiaries.
"I expect to see more banks spinning off their sharia units as the new VAT law which scraps double taxation from sharia transactions will take effect next year," said Adiwarman Karim, chief of Karim Business Consulting.
The firm offers consultancy services on the Islamic market, including the establishment of Islamic banks.
Indonesia currently has five sharia banks and 24 commercial banks with sharia units as of August 2009, out of around 130 commercial banks operating in Southeast Asia's biggest economy.
ACQUISITIONS
BCA vice president director Jahja Setiaatmadja told Reuters the bank was in the final stage of setting up such a unit, adding that operations may start in January. He declined to give further details.
BCA, with a stock market value of $12 billion, acquired Bank UIB in October 2008 and planned to convert the small lender into a sharia bank.
Ramzi A. Zuhdi, director in charge of Islamic banking at the Indonesian central bank, said it took about a month for banks to obtain approvals to convert their Islamic banking units into Islamic banks if all the administrative requirements were met
In neighbouring Malaysia, seen as the Islamic financial hub in Asia, domestic banks can immediately convert their Islamic units operating under the parent companies into separate entities, said Vaseehar Hassan Abdul Razack, chairman of Unicorn International Islamic Bank Malaysia.
Riawan Amin, the chairman of Indonesia's association of Islamic banks (Asbisindo), said it often took longer than initially expected to launch Islamic banks in the country due partly to administrative reasons such as in recruiting employees.
October 23th 2009 By Reuters.
* Revised law on VAT encouraging banks to set up sharia units
* Paper reports U.S. insurer looking at buying sharia bank
JAKARTA - Five Indonesian banks including Bank Central Asia (BBCA.JK), the No. 3 lender, expect to launch standalone sharia units next year, boosting the sharia market in the world's most populous Muslim nation, officials said.
Industry officials said the revised law on value added tax, which removed double taxation in the Islamic market, would encourage more banks to set up Islamic banking subsidiaries. The double taxation had made Islamic transactions more expensive than comparable conventional deals.
"We hope that it would be easier for us to expand business and seek strategic partners. We also hope to grow faster and attract investors from Middle East," said Barno Sudarwanto, head of planning and development at the sharia unit of Bank Negara Indonesia (BBNI.JK), the No. 4 bank, which will be spun off.
Others due to set up separate sharia banking units include mid-sized lenders Bank Panin (PNBN.JK), Bank Victoria (BVIC.JK) and unlisted Bank Jabar Banten.
Investor Daily newspaper on Friday reported that a U.S. insurance firm had met with central bank officials this week to discuss the possibility of buying an Islamic-compliant lender in Indonesia, without giving details.
Conventional banks typically set up their Islamic subsidiaries by first setting up Islamic banking departments and later on converting them into separate Islamic banks. Others, including BCA, may acquire smaller conventional banks and turn them into Islamic subsidiaries.
"I expect to see more banks spinning off their sharia units as the new VAT law which scraps double taxation from sharia transactions will take effect next year," said Adiwarman Karim, chief of Karim Business Consulting.
The firm offers consultancy services on the Islamic market, including the establishment of Islamic banks.
Indonesia currently has five sharia banks and 24 commercial banks with sharia units as of August 2009, out of around 130 commercial banks operating in Southeast Asia's biggest economy.
ACQUISITIONS
BCA vice president director Jahja Setiaatmadja told Reuters the bank was in the final stage of setting up such a unit, adding that operations may start in January. He declined to give further details.
BCA, with a stock market value of $12 billion, acquired Bank UIB in October 2008 and planned to convert the small lender into a sharia bank.
Ramzi A. Zuhdi, director in charge of Islamic banking at the Indonesian central bank, said it took about a month for banks to obtain approvals to convert their Islamic banking units into Islamic banks if all the administrative requirements were met
In neighbouring Malaysia, seen as the Islamic financial hub in Asia, domestic banks can immediately convert their Islamic units operating under the parent companies into separate entities, said Vaseehar Hassan Abdul Razack, chairman of Unicorn International Islamic Bank Malaysia.
Riawan Amin, the chairman of Indonesia's association of Islamic banks (Asbisindo), said it often took longer than initially expected to launch Islamic banks in the country due partly to administrative reasons such as in recruiting employees.
October 23th 2009 By Reuters.
Thursday, October 22, 2009
SBI eyes second buy in Indonesia
Mumbai: State Bank of India (SBI), the country's largest bank, is actively considering a buyout in Indonesia. The deal size is expected to be over $100 million.
A senior SBI executive told FE, “The bank has already shortlisted three to four Indonesian banks for the proposed acquisition.” The deal would be SBI's second acquisition in Indonesia. In 2006, SBI had acquired 76% stake in PT Bank Indo Monex, an Indonesia bank, which was renamed as Bank SBI Indonesia—a SBI subsidiary.
"The Indonesian bank, which SBI is eyeing, would be merged with Bank SBI Indonesia that currently offers retail and wholesale banking services through 12 branches in the country," the SBI executive said.
In a bid to capitalise on the rising trade and investment between Indonesia and India, Bank SBI Indonesia had launched its foreign exchange trade facility last month. This facility enables the bank to offer foreign exchange services, trade finance and remittance facilities, and depository advisory services. Indonesia is India's second largest export market in Asean after Singapore. India is one of the largest importers of Indonesian commodities including palm oil, coil and gambier.
Indonesia is ranked 16th as a source of imports for India at $6.1 billion as on March 30, 2009, up 38% over the previous year. Currently, India's investments in Indonesia are at an impressive $2 billion. Indo-Indonesian trade crossed $10.6 billion last fiscal.
Sources reveal that SBI is also assessing a possibility to penetrate in countries such as Thailand and Vietnam. The bank is likely to open a representative office in Malaysia by March 2010. SBI's thrust to capture the lucrative business from the Far East region is evident from its Singapore subsidiary's balance sheet size that crossed $2 billion-mark as on September 30, 2009. SBI Singapore's trade finance business grew over 50% in the last six months.
To promote retail lending in Singapore, SBI is expected to open three new branches and two more off-site ATMs at a cumulative investment of over sing$35 million, and recruit over 60 personnel across various levels in the next 3-4 months. The bank launched its mortgage service on August 9, 2009. Till-date, it has transacted business worth over sing$10 million. SBI Singapore currently operates six branches and five off-set ATMs in the country.
As on March 30, 2009, SBI had 92 overseas offices across 32 countries, comprising of 37 branches, five sub offices, eight representative offices, 35 branches of subsidiaries, three managed exchange.
A senior SBI executive told FE, “The bank has already shortlisted three to four Indonesian banks for the proposed acquisition.” The deal would be SBI's second acquisition in Indonesia. In 2006, SBI had acquired 76% stake in PT Bank Indo Monex, an Indonesia bank, which was renamed as Bank SBI Indonesia—a SBI subsidiary.
"The Indonesian bank, which SBI is eyeing, would be merged with Bank SBI Indonesia that currently offers retail and wholesale banking services through 12 branches in the country," the SBI executive said.
In a bid to capitalise on the rising trade and investment between Indonesia and India, Bank SBI Indonesia had launched its foreign exchange trade facility last month. This facility enables the bank to offer foreign exchange services, trade finance and remittance facilities, and depository advisory services. Indonesia is India's second largest export market in Asean after Singapore. India is one of the largest importers of Indonesian commodities including palm oil, coil and gambier.
Indonesia is ranked 16th as a source of imports for India at $6.1 billion as on March 30, 2009, up 38% over the previous year. Currently, India's investments in Indonesia are at an impressive $2 billion. Indo-Indonesian trade crossed $10.6 billion last fiscal.
Sources reveal that SBI is also assessing a possibility to penetrate in countries such as Thailand and Vietnam. The bank is likely to open a representative office in Malaysia by March 2010. SBI's thrust to capture the lucrative business from the Far East region is evident from its Singapore subsidiary's balance sheet size that crossed $2 billion-mark as on September 30, 2009. SBI Singapore's trade finance business grew over 50% in the last six months.
To promote retail lending in Singapore, SBI is expected to open three new branches and two more off-site ATMs at a cumulative investment of over sing$35 million, and recruit over 60 personnel across various levels in the next 3-4 months. The bank launched its mortgage service on August 9, 2009. Till-date, it has transacted business worth over sing$10 million. SBI Singapore currently operates six branches and five off-set ATMs in the country.
As on March 30, 2009, SBI had 92 overseas offices across 32 countries, comprising of 37 branches, five sub offices, eight representative offices, 35 branches of subsidiaries, three managed exchange.
Sunday, October 18, 2009
Malaysia's RHB to pay $356mln for Bank Mestika
KUALA LUMPUR-
Malaysia's fourth-biggest lender RHB Capital (RHBC.KL) will pay 1.2 billion ringgit ($356.1 million) in cash for a controlling stake in Indonesia's PT Bank Mestika Dharma, joining rivals in the chase to gain a foothold in Southeast Asia's most populous country.
RHB said in a statement ahead of a press conference on Monday that it would also undertake a rights issue of 361 million shares, priced at 3.60 ringgit per share.
Malaysia's top two banks, Malayan Banking (Maybank) (MBBM.KL) and CIMB (CIMB.KL), already have a presence in the underbanked Indonesian market.
Analysts said loans growth in Indonesia's banking market, with its huge population, are expected to grow 15-25 percent this year.
Bank Mestika is based in Medan in Sumatra, Indonesia's third-most populous city after Jakarta and Surabaya.
Malaysia's fourth-biggest lender RHB Capital (RHBC.KL) will pay 1.2 billion ringgit ($356.1 million) in cash for a controlling stake in Indonesia's PT Bank Mestika Dharma, joining rivals in the chase to gain a foothold in Southeast Asia's most populous country.
RHB said in a statement ahead of a press conference on Monday that it would also undertake a rights issue of 361 million shares, priced at 3.60 ringgit per share.
Malaysia's top two banks, Malayan Banking (Maybank) (MBBM.KL) and CIMB (CIMB.KL), already have a presence in the underbanked Indonesian market.
Analysts said loans growth in Indonesia's banking market, with its huge population, are expected to grow 15-25 percent this year.
Bank Mestika is based in Medan in Sumatra, Indonesia's third-most populous city after Jakarta and Surabaya.
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