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AKARTA: Publicly listed private lender PT Bank Sinarmas Tbk, of the Sinar Mas Group conglomerate, will offer a rights issue of shares in the second quarter of this year to expand its operations.

“Proceeds raised from the offering will be used to expand the bank’s general operations, and specifically to expand the branch networks to [be able to] reach more customers and increase our information technology (IT) system,” the bank said in a statement filed with the Indonesian Stock Exchange (IDX).

PT Sinar Mas Multiartha Tbk, the financial holdings arm of the Sinar Mas Group conglomerate, will absorb “a part of” Bank Sinarmas’ rights issue share offering to maintain its ownership of the lender, using funds from a new shares’ issuance that will be absorbed by strategic investors, according to the lender.

As reported earlier, Sinar Mas Multiartha is currently seeking foreign investors, most likely from Asia, to buy up to 10 percent of its enlarged capital because the new shares offering does not carry rights for existing shareholders to absorb, the bank’s director, Kurniawan Udjaja, said.

Shares of Bank Sinarmas fell 1.8 percent following the announcement, closing at Rp 275 (3 US cents) apiece on Wednesday, while Sinar Mas Multiartha’s shares remained unchanged at Rp 4,100 each.