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The State Enterprises Ministry has given the go-ahead for Bank Negara Indonesia to acquire state brokerage firm Bahana Securities with an eye toward merging it with BNI Securities.

“We support BNI’s plan to acquire Bahana because it can strengthen Bahana’s financial capacity,” the state enterprises minister, Mustafa Abubakar, said on Monday. “BNI may also merge Bahana with BNI Securities, creating a strong securities company.”

Mustafa spoke after approving the proposal by BNI, the nation’s fourth-largest lender by assets, to acquire Bahana Securities, which is experiencing financial difficulties after underwriting the initial public offering of flag carrier Garuda Indonesia in February.

“It’s entirely up to both companies,” he said. “We will not interfere in the process. This is purely a business-to-business deal.”

BNI’s president director, Gatot Suwondo, said the lender had planned since 2008 to acquire a stake in a state financial company. Under the plan, BNI would swap some of the recapitalized bonds on its books for a stake in the targeted company.

Total government bonds, including the recapitalized bonds held by BNI, were worth around Rp 32.5 trillion ($3.7 billion) as of 2010, based on financial reports.

“Bahana and Danareksa Sekuritas are the ones closely in line with our line of business,” Gatot said. “We’re not eyeing an insurance company because our insurance unit, BNI Life, is doing well.”

Bahana Securities, Danareksa Sekuritas and Mandiri Sekuritas were the main local underwriters for Garuda’s IPO in February. They suffered major losses after Garuda’s shares slid 17 percent in its trading debut as investors were scared off by the high price set by the government.

The underwriters absorbed as much as 47 percent of the IPO, or 6.3 billion shares. Garuda’s shares, which were priced at Rp 750, closed in their trading debut near Rp 500. The shares ended trading on Monday at Rp 540.

According to Investor Daily, Bahana’s working capital on Feb. 10 — a day before Garuda’s debut — was Rp 201.64 billion, but that fell to Rp 89.69 billion as of March 2. Mandiri’s capital slipped from Rp 166.07 billion to Rp 118.41 billion, while Danareksa saw its working capital fall from Rp 473.57 billion to Rp 253.11 billion.

Mustafa ruled out BNI acquiring Danareksa or Mandiri Sekuritas, saying Danareksa was a historic brokerage firm and Mandiri Sekuritas had the backing of Bank Mandiri, Indonesia’s largest lender by assets.

“Danareksa is Indonesia’s first brokerage and our plan is to strengthen its capacity. Mandiri Sekuritas’s financial condition is relatively stable,” he said.

Juniman, an economist at Bank Internasional Indonesia, said the acquisition would benefit both BNI and Bahana Securities. “It will help BNI enter the small- and micro-business sector, while Bahana Securities will get fresh capital,” he said.

Eko Yuliantoro, president director of Bahana Securities, said there had been “talks” with BNI but no move toward an acquisition or merger. He declined to comment further.