JAKARTA, KOMPAS.com - Indonesia's newest private equity and financial advisory firm Yawadwipa Companies has notified the government that it wants to take over PT Bank Mutiara from the government in a deal that could be worth more than $750 million.
The state took the bank over in a controversial bailout in 2008 when it was called Bank Century and was struggling with debt. The Indonesian government now wants to sell the now-healthy bank to recover its investment.
“Yawadwipa believes the Mutiara platform consists of many attractive businesses and has proven itself an innovator while restoring trust over the past three years,“ said the company in a news release seen by the Wall Street Journal. “It has achieved strong results in the face of extraordinary internal and external pressures.“
Firdaus Djaelani, executive chairman of Indonesia's Deposit Insurance Agency, which oversees the bank's operations, said last week that Indonesia plans to start looking for strategic investors for the bank this month and complete the sale process in November. Yawadwipa said it was ready to consider taking over the bank, possibly with a large institutional partner, at the minimum price specified by the government of around $750 million.
Yawadwipa is headed by Chad Holm, a former managing director at Bank of America's financial-institutions group in Asia. It was established this year with the aim of building a $1 billion private equity fund, called the Java Fund, mostly from Indonesian investors.
Some analysts have been skeptical about the possibilities of a quick sale of Mutiara. How the bank was bailed out has been a hot political issue for years. Some lawmakers are still pushing for an investigation into the decision to bail out the bank during the 2008 global financial crisis.
Yawadwipa said that while it sees a lot of potential in Mutiara, and it is willing to discuss its plans for the bank with all stakeholders, it would not want to see the deal delayed by politics.
“We have limited interest in devoting substantial effort to a highly complex situation that will inevitably slow other initiatives, potentially including the Java Fund, if political grandstanding and bureaucracy impede a constructive and sensible solution,“ the company said.