Yawadwipa expresses interest in acquiring Bank Mutiara

A newly established investment company, Yawadwipa Companies, expressed its interest on Monday in making a bid for Bank Mutiara from the Deposit Insurance Agency (LPS), the sole owner of the bank since the 2008 government bailout.

Yawadwipa said in a written statement that it was prepared to assess the merits of acquiring 100 percent stakes of Mutiara, which was formerly known as Bank Century, and is ready to inject fresh funds to improve the bank’s capital ratios to accelerate growth.

“Yawadwipa Companies has formally expressed to Bank Mutiara’s financial advisor its strategic interest in acquiring the bank from the Deposit Insurance Agency (LPS). The purchasing price will be no less than LPS’s take over expenses of Rp 6.7 trillion, or about US$750 million,” the company said.

LPS executive director Firdaus Djaelani said that Yawadwipa had yet to officially inform the agency about its interest. State-owned securities firm PT Danareksa Sekuritas, which last year was appointed to serve as financial advisor for LPS’s divestment in Mutiara, declined to comment when asked if Yawadwipa had filed an official bidding request for the bank’s acquisition.

LPS took over ailing Bank Century and re-branded it Bank Mutiara in 2008. The agency has to fix and sell the bank within three to five years after the acquisition. Under the law on state bailouts, LPS has to sell the bank for at least the price the agency paid.

LPS opened the selling period for Mutiara last year. Nine investors expressed interest in buying the bank from LPS, but all of them failed to meet the necessary requirements.

PT Bank Negara Indonesia Tbk (BBNI), the nation’s fourth largest lender by assets is currently seeking a financial institution — most likely a bank — despite disinterest among local banks refraining from potential to acquire Mutiara despite its improved financial ratios.

“[Mutiara] has risky political issues. It is sensitive for us to buy,” BNI’s president director Gatot Suwondo said. “Banks are very sensitive to perceptions.”

LPS corporate secretary Samsu Adi Nugroho said that earlier this month the agency had started another offering period to sell Mutiara.

“The offering period will last until around May and we expect to reach a deal in August,” Adi said.

Yawadwipa, whose name derives from Sanskrit, meaning the noble island of Java, is a merchant banking operation comprised of a collection of regionally and globally focused entities initially engaged in investment management and strategic advisory services. Yawadwipa also said that it would seek to complement its core services with additional products and partnerships, including through acquisitions.

Yawadwipa’s chief executive officer is Christopher Holm, who previously served as a senior executive at Bank of America Merrill Lynch, Citigroup and Lazard.

Yawadwipa has also appointed Prasetyo Singgih, the vice chairman of the Indonesian Chamber of Commerce and Industry (Kadin) committee on China and the senior partner of Jakarta-based law office Singgih and Partner, as chief operating officer and general counsel. (rcf)