Friday December 10, 2010
Maybank told to sell down stake in Indonesian bank
By LEONG HUNG YEE
hungyee@thestar.com.my
PETALING JAYA: Malayan Banking Bhd's (Maybank) Indonesia unit, PT Bank Internasional Indonesia (BII), saw its shares jump to a 10-year high amid comments by the country's regulator that Maybank refloat a 20% stake in BII within six months.
BII's shares surged 25% yesterday to 1,010 rupiah a piece. Its share price has also appreciated by more than 215% year-to-date.
Yesterday, Bloomberg quoted Indonesia capital market regulator chairman Ahmad Fuad Rahmany who said that Maybank needed to fulfil its sell-down requirement and complete the exercise by June 1, 2011.
Maybank acquired BII in 2008 for RM7.9bil and holds a 97.5% stake. Maybank said last Friday that it had received a letter from the Indonesian Regulatory Authority for Indonesian Capital Market (Bapepam) that gave it an extension of time to June 1, 2011 to complete its sell-down.
But Maybank added then that it may request for further extension if the sell-down exercise would result in it incurring a potential loss in excess of 10% of its original value of the BII acquisition.
While analysts said Maybank could potentially realise a gain from the sale of the 20% stake given the high share price of BII, the problem is likely to be finding potential buyers willing to pay such a high price.
PT Ciptadana Securities head of sales John Teja was quoted by Bloomberg as saying the shares rose on expectation Maybank would sell the stake at a higher price.
MIMB Investment Bank research head Chan Ken Yew said it was a definitely good deal if Maybank could sell its stake at such a high price.
He said Maybank paid a book value of four times when it bought the bank but said that BII's current market price was around 9.9 times its book value.
A local bank-backed head of research said that despite the lofty price of BII, it should be noted that Maybank did a huge write down after the take-over.
He also said that the main reason why Maybank has delayed its sell down of BII shares was because it has not found a buyer willing to pay a price around the current trading price of BII.
It is not easy to find a buyer. Furthermore, I think the Indonesian regulator may not want another Malaysian entity to take up such a big block in BII. Hence Maybank is likely to be looking for an Indonesian partner that could potentially add value to BII, but that's whats taking time, he said.
It is likely that Maybank will place out the shares either to one entity or a group of insitutions. Maybank expects its international operations from countries such as Singapore and Indonesia to contribute 40% to the group's net profit by 2015.
For the nine months ended Sept 30, BII posted a net profit of 415 billion rupiah (US$47mil) despite an earlier significant impairment charge in 2009.
This marked a significant turnaround from a net loss of 183 billion rupiah (US$19mil) in the same period last year.
http://biz.thestar.com.my/news/story.asp?file=/2010/12/10/business/7594718&sec=business
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