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Sinar Mas still keen to take over Century
Publicly listed investment and financing company PT Sinar Mas Multiartha still finds ailing Bank Century an attractive proposition and says it will take the bank over once the government supported Deposit Insurance Agency (LPS) completes its work
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Publicly listed investment and financing company PT Sinar Mas Multiartha still finds ailing Bank Century an attractive proposition and says it will take the bank over once the government supported Deposit Insurance Agency (LPS) completes its work.
During the company's public disclosure session Monday, Sinar Mas president director Edward Hadidjaja said that interest in Century would depend on the agreed selling price the LPS was willing to offer.
"Our interest in Century remains, but it will depend on the restructuring progress currently being handled by the LPS," said Edward.
Sinar Mas, owner of mid-size Bank Sinarmas and Sinarmas Securities, announced on Nov. 17 a plan to buy a 70 percent stake in Century prior to the government taking over of the bank on Nov. 21 due to its deteriorating capital adequacy ratio (CAR), which had plunged to negative 2.3 percent.
The CAR is a gauge of a bank's financial health, with the mandatory minimum set at 8 percent.
Century has ever since been under the wing of the LPS, which has so far injected Rp 2.5 trillion (US$221 million) into the bank bringing its CAR back up to more than 10 percent.
As reported earlier, Bank Indonesia has suggested that private investors, including Sinarmas, should help to clear up banking problems.
Sources at BI have said the central bank had to persuade Sinar Mas Group to buy Century because if it had to be liquidated, the LPS did not have enough funds to cover all the possible defaults on the bank's deposits.
However, the group requested Century to be restructured by the LPS before the takeover could be completed as it perceived it to be far more risky to buy Century prior to supervized restructuring by the LPS.
Sinar Mas Group, the parent of Sinar Mas Multiartha, is controlled by tycoon Eka Tjipta Widjaya, the former owner of Bank Internasional Indonesia.
BI has said Century would likely stay under the LPS for at least six months. (hwa)
