Regional Lender Bank Jatim Seeks Rp 1.28t in 20% Listing
Regional development lender Bank Jatim is set to raise Rp 1.28 trillion ($136 million) in an initial public offering of shares next month after the company set the price on Thursday, an underwriter said.
East Java’s Bank Jatim — known formally as Bank Pembangunan Daerah Jawa Timur — would be the second regional development to have an IPO, after Banten and West Java’s Bank Jabar Banten in 2010.
The IPO price has been set at Rp 430 per share, the lower end of the target price of Rp 430 to Rp 670, according to a Reuters report citing Andi Sidharta, a director at Bahana Securities, an underwriter.
The pricing is further evidence that companies in Southeast Asia are struggling to lure investors because of global uncertainty and the euro-zone crisis. Malaysia has been the region’s only exception.
“Eighty percent of the committed buyers are from global and local institutions,” Andi said.
The bank plans to sell 2.98 billion shares, equal to 20 percent of its enlarged capital. It has appointed Bahana Securities and Mandiri Sekuritas as lead underwriters.
The offering will run from Tuesday to Thursday with a planned listing on the Indonesia Stock Exchange on July 11, the lender said in a brief prospectus published in Investor Daily early this month.
Bank Jatim hopes to use the IPO to boost its capital adequacy ratio — a measure to assess a lender’s health — to 21 percent, higher than the 8 percent minimum requirement set by Bank Indonesia, the central bank.
The bank will use 80 percent of the proceeds from the IPO to boost its lending, the company said.
The lender has forecast its lending to grow 23 percent this year. Bank Indonesia has forecast growth in lending by the country’s commercial banks at 24 percent.
Bank Jatim’s focus is on providing loans to small- and medium-sized enterprises. The SMEs account for 80 percent of Bank Jatim’s lending portfolio, with 20 percent in corporate loans.
Additional reporting from Reuters