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New Mutiara owner may get control before December
The acquisition of publicly listed Bank Mutiara by Japanese finance company J Trust Co
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he acquisition of publicly listed Bank Mutiara by Japanese finance company J Trust Co. Ltd. is close to completion following approval from the Deposit Insurance Corporation (LPS), the state agency that owns a majority stake in the lender.
An extraordinary shareholders meeting of the LPS approved on Monday the acquisition, bringing the lengthy divestment close to an end.
J Trust Co. Ltd., listed on the second section of the Tokyo Stock Exchange under the code 8508, was selected in September as the final bidder in the auction of Bank Mutiara, of which a 99.96-percent stake is owned by LPS and the remainder by the public.
LPS corporate secretary Samsu Adi Nugroho said J Trust already paid 10 percent of the total sale price as a down payment, although he declined to mention the exact amount.
Samsu said the LPS expected the new owner would close the deal and officially sign the document before Nov. 20. He added that the new owner would undergo a fit-and-proper test conducted by the Financial Services Authority (OJK), which would give its final approval between Nov. 19 and 21.
'We hope that the signing will be conducted either on Nov. 20 or 21, because the legal process at the Law and Human Rights Ministry takes more time. Technically, Bank Mutiara will have a new owner on Nov. 20,' he said at a press conference.
Previously, no official information has been released regarding Mutiara's auction price. However, The Jakarta Post's sources, who spoke on condition of anonymity as they were not authorized to discuss the matter, said that the price was between three and four times the bank's price-to-book value.
Mutiara reportedly had Rp 1.44 trillion in equities in June, hence an amount three to four times the PBV could set the auction price at Rp 4.31 trillion to Rp 5.74 trillion.
- LPS extraordinary shareholders meeting approves acquisition
- J Trust has already paid 10 percent of total sale price
- Sale documents to be signed before Nov. 20
The LPS spent Rp 6.7 trillion to rescue Mutiara in 2008 ' which was then known as Bank Century ' from its previous owner, Robert Tantular, with an additional capital injection topping Rp 1.25 trillion in 2013. The bailout angered legislators who claimed the government had misused taxpayers' money.
As the new owner, J Trust is exempt from a regulation on banking ownership issued by Bank Indonesia in 2012 that sets the ownership limit at 40 percent for any new institutional shareholder.
According to the regulation, however, the new owner of a bank that has been bailed out by the LPS may hold majority control for a period of 20 years from the time of purchase.
The selection of J Trust ends Mutiara's long and winding divestment. The LPS is required by law to divest a rescued bank at its bailout price within three years of rescue, extendable for two one-year periods.
The offer lapsed in 2013 with no buyer at all because of its sky-high price. Mutiara was then put up for auction in 2014, the final year of divestment. J Trust was selected because the company, aside from agreeing on the sale price, was also committed to resolving Bank Mutiara's high non-performing loans, Samsu added.
'A lot of other prospective investors did not show their commitment to improving a number of problems related to the bank's management,' he said.
Also on Monday, OJK commissioner on banking supervision Nelson Tampubolon said that his institution had yet to receive the report on J Trust's plan to register for a fit-and-proper test, citing that he hoped 'the process can be conducted immediately'. (gda)
