Bank Negara Indonesia (BNI), the nation’s fourth-largest bank by assets, is set to launch a rights issue in early December, releasing 3.37 billion new shares, or around 13 percent of its total equity.
“For every 500,000 BNI shares our shareholders own on Dec. 8 at 4 p.m., they will have preemptive rights to purchase 110,473 of the new shares at between Rp 2,300 and Rp 3,700 apiece,” BNI says in an official statement issued Tuesday.
State-owned Bahana Securities, which has been mandated as the standby buyer for the shares offer, said the fixed price for the rights issue would be announced after a book building period which will conclude at the end of November.
“We will travel to Singapore, Hong Kong, London, New York and Boston starting in the second week of November, to gauge foreign investor demand, which will be used as the basis to decide the final price,” Bahana Securities president director Eko Yuliantoro told The Jakarta Post.
Goldman Sachs, UBS Securities, Morgan Stanley Securities, Macquarie Securities and Credit Suisse Securities have also been appointed as selling agents for the rights offer.
The final price for the new shares offered to the general public will be decided by the government, as the majority (71.84 percent) shareholder of BNI, Eko said.
“The government has decided not to use its rights to buy new shares. Therefore, the government’s share in BNI will be reduced to around 60 percent,” he said. This would bring the publicly owned stake in the bank to around 40 percent after the rights issue.
If the government decides to base the rights issue prices in the same range as that offered to existing shareholders (between Rp 2,300 and Rp 3,700 apiece), BNI could raise between Rp 7.75 trillion and Rp 12.46 trillion from the rights offer.
According to the banks official statement regarding the offer, BNI will use most of the proceeds from the rights issue (around 80 percent), to fund loans to corporations, consumers and small and medium enterprises.
BNI lending grew by only 5 percent in the first half of this year, far less than the average for loan growth among national banks (about 18.88 percent) over the same period.
Previously, BNI officials said the bank had cut its full-year 2010 loan growth target to 14 percent from the previous 17 percent on concerns over sluggish lending growth in the first half and the bank’s capital adequacy ratio of 13.3 percent.
“About 15 percent of the proceeds from the rights offer will be used to develop information technology infrastructure, outlets and ATMs, while around 5 percent will go toward developing BNI’s subsidiaries,” the statement says.
BNI shares (BBNI) were traded higher on Tuesday following the rights issue announcement, to close up 0.63 percent, or 25 points, at Rp 3,975 a piece. BNI shares have climbed more than 100 percent this year, outperforming the broader Jakarta composite index (JCI)’s 42 percent jump.
BNI, which conducted its initial public offering (IPO) in 1996, selling its shares for Rp 850 each, now has a total market capitalization of more than Rp 61 trillion.
The lender posted a 59.3 percent increase in net profit in the January-September period, to Rp 2.95 trillion from the previous Rp 1.86 trillion. The jump was mainly the result of higher net interest and sharia income at Rp 9 trillion up to September of this year, which was up 8.4 percent from last year’s Rp 8.31 trillion. (est)
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