OJK waiting for report on acquisition of Danamon stake

Jakarta (ANTARA News) - The Financial Services Authority (OJK) is waiting for an official report from Japanese bank, The Bank of Tokyo-Mitsubishi UFJ Ltd. (MUFG), which plans to acquire PT Bank Danamon shares of up to 73.8 percent.

Chairman of the Board of Commissioners of OJK, Wimboh Santoso, said that the acquisition plan by MUFG can be carried out as long as it is in accordance with applicable rules.

Under the Regulation of the Financial Services Authority (POJK) on Commercial Bank Ownership, the legal entity of a bank or financial institution may own a bank share of more than 40 percent of the banks capital, insofar as it obtains approval from OJK. As for other conditions, the bank must go public to achieve public ownership criteria of at least 20 percent.

"Actually, the 40 percent benchmark is something we have to apply consistently; but of course, we have to have a way out. Of course, it will not violate the provisions. But the information is not yet final," Santoso stated, on the sidelines of the OJK Kindly event in Jakarta, on Tuesday.

OJK believed that all corporate actions, both mergers and acquisitions, must have an impact for the domestic economy to grow even higher in the future. He asked MUFG to draw up a long-term plan regarding the corporate action on the acquisition of Danamons shares.

"If you want to buy more than 40 percent, please talk to us about it; but we have a goal to make this ownership more prominent, thus giving the opportunity for more people to invest," Santoso noted.

However, he was reluctant to answer questions on whether OJK would give a green light to the acquisition plan.

"Tell us what to report here. We have not seen the people or the paper," he remarked.

Previously, MUFG had agreed on a conditional sale and purchase agreement with Asia Financial (Indonesia) Pte Ltd and other entities to acquire 73.8 percent stake in PT Bank Danamon Tbk.

Based on official information of BTMU, strategic investment will be done in three stages. In the first phase, BTMU will purchase 19.9 percent of Bank Danamons shares at Rp8,323 per share, with Rp15.875 trillion of funds being prepared. The price is based on twice the price to book the value of the company in the third quarter of this year.

In the second phase, BTMU plans to obtain the necessary approval under the legislation and other agreements regarding additional 20.1 percent of shares to be acquired. That way, in the second phase, BTMU will become a 40 percent shareholder of Bank Danamon. This stage is targeted to be completed in the second or third quarter of 2018 and is subject to approval by OJK.

In the third stage, BTMU plans to again request approval to increase ownership of shares above 40 percent. At this stage, BTMU will allow other shareholders to remain shareholders or get cash from BTMU. With the implementation of Phase 3, MUFG ownership in Danamon is expected to be more than 73.8 percent of Danamons total issued shares.

Source: ANTARA News

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