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Indonesian conglomerate hikes stake in mid-sized bank

Publication Date : 08-04-2014

 

Indonesian conglomerate Bosowa Corporation announced on Monday that it was increasing its stake in mid-sized lender Bank Bukopin (BKP) to expand its financial wing.

Bosowa, founded by renowned businessman Aksa Mahmud, who is also former deputy speaker of the People’s Consultative Assembly (MPR) from the Golkar Party, expects its ownership to increase to 30 percent from the current 18.57 per cent, the company announced.

No details were immediately available on the share price agreed to by Bukopin and Bosowa.

Bukopin’s shares were traded at 655 rupiah (5 US cents) on the Indonesia Stock Exchange (IDX) on Monday, a 4 per cent increase a day after the purchase announcement.

The additional 11.43 per cent stake, equavalent to 1.04 billion shares, is currently held by the State Logistics Agency Workers Cooperative (Kopelindo).

The deal is subject to approval from Bukopin’s shareholders and the Financial Services Authority (OJK). If approved, Kopelindo will see its ownership reduced to 18.09 per cent from 29.52 per cent at present.

The remaining stake is held by the investing public with 40.48 per cent ownership and the Indonesian Republic at 11.43 per cent.

Bosowa president director Erwin Aksa said the group would use internal cash to finance the share acquisition.

“Our cash position is strong,” he said in a telephone interview.

Bosowa managing director Sadikin Aksa said that the planned acquisition would enable Bosowa to expand in the micro-, small- and medium-scale market, especially in the central and eastern parts of Indonesia.

The group, stemming from Makassar, South Sulawesi, is currently one of few major players in the regions with its nine business sectors, including cement, automotive and finance.

Its cement business, which is operated by PT Semen Bosowa Maros and PT Semen Bosowa Indonesia, now runs on an annual combined capacity of 5.2 million tonnes to 5.5 million tonnes.

In finance, the group now runs several companies, such as insurance firm PT Asuransi Bosowa Periskop, brokerage firm PT Royal Trust Capital and multfinance firm PT Sadira Finance.

Bosowa also has a 20.12 per cent stake in publicly listed lender Bank QNB Kesawan through PT Bosowa Kapital.

Bosowa is expected to provide funds to strengthen Bukopin’s capital, as the lender hopes to become one of the 10 most profitable banks in Indonesia by 2016.

 

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