Small lender Bank Artos denies Gojek links, says rights issue on track

People walk past a statue of a bull as they enter the Indonesia Stock Exchange (IDX) in Jakarta, Indonesia. Photographer: Dimas Ardian/Bloomberg

Bandung-based small lender Bank Artos on Monday denied market rumours that it was planning to forge a tie-up with ride-hailing major Gojek or work exclusively as its banking arm.

Speculation about its relationship with Gojek has been rife since it announced the sale of a majority stake in August to Hong Kong-based investment firm Wealth Track Technology (WTT) and Jakarta-based IT service provider Metamorfosis Ekosistem Indonesia (MEI) for an undisclosed amount.

In a filing to the Indonesia Stock Exchange (IDX) on August 22, Bank Artos had announced that WTT and MEI plan to pick up a 51 per cent stake in the lender. WTT, which is owned by Patrick Walujo, will purchase a 13.35 per cent stake in the bank, while MEI will acquire 37.65 per cent.

Walujo is the founder of private equity firm Northstar Group, which was an early Gojek backer. MEI was founded by Jerry Ng, a former chief executive at small lender Bank Tabungan Pensiunan Nasional (BTPN) who transformed the company into a tech-based bank.

“We have never been approached, discussed [to partner] with Gojek or any other similar entity. Such rumour is definitely not coming from us,” Bank Artos acting president director Deddy Triyana told reporters on Monday.

On October 1, Bank Artos had submitted the stake acquisition plan to the Financial Services Authority (OJK) for its approval. The lender had previously secured shareholder approval through an extraordinary general meeting on September 30.

Following the Gojek rumours, the lender’s stock has been suspended four times since August 19 as its stock price soared 1,300 per cent since early this year.

Bank Artos has previously said that it aims to revamp its core business, which focuses on commercial banking services for SMEs, to become a digital bank.

“When the acquisition process is completed, we will focus to serve the low and middle-income segment through the digital platform. Such segment is dominated by consumers in the productive age, which is now growing rapidly in Indonesia,” Triyana said.

After the acquisition, the lender also plans to raise 1.5-1.6 trillion rupiah through a rights issue.

According to its prospectus, the company plans to issue a maximum of 15 billion new shares at a nominal price of 100 rupiah apiece, although it is yet to disclose the exercise price. The move will help Bank Artos increase its core capital, which stood at 128.57 billion rupiah at the end of June this year, to more than 1 trillion rupiah.

OJK mandates banks to have core capital of between 1 trillion rupiah and 5 trillion rupiah to be classified as a second-tier bank, also known as BUKU 2, which allows them to offer electronic banking services and foreign exchange financing.

The proceeds from the rights issue will also be allocated for new product development, IT infrastructure investments, and talent acquisition.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.