Singapore’s sovereign wealth fund GIC Private Limited is the latest investor in Indonesia’s Bank Jago.
The fresh investment by GIC, worth Rp3.15 trillion ($222.48 million), will be made by absorbing 1.19 billion new shares of Bank Jago through a rights issue, according to a disclosure to the Indonesia Stock Exchange (IDX).
Bank Jago, which is backed by the ride-hailing giant Gojek, will issue 3 billion new shares with an execution price of Rp2.350 per share. The rights issue will be conducted on March 10-17 in the regular market.
If the existing investors absorb all new shares, the lender will raise Rp7.05 trillion (almost $500 million), increasing the bank’s total capital to Rp8 billion ($565 million).
After the rights issue, GIC will own 9.67-10.23% in Bank Jago. Meanwhile, shares of the existing controlling shareholders PT Metamorfosis Ekosistem Indonesia, Wealth Track Technology Limited, and PT Dompet Karya Anak Bangsa (Gojek) will get diluted.
Northstar-backed PT Trimegah Sekuritas Tbk will be a standby buyer to absorb new shares if the other investors don’t execute the new shares.
Bank Jago's shareholders
| Shareholders | Before the rights issue (as of 29 Jan 2021) | After the rights issue (if the public buy new shares) | After the rights issue (if public don't absorb new shares) |
|---|---|---|---|
| PT Metamorfosis Ekosistem Indonesia | 37.65% | 29.81% | 31.53% |
| Wealth Track Technology Limited | 13.35% | 11.69% | 12.36% |
| PT Dompet Karya Anak Bangsa | 22.16% | 21.64% | 22.64% |
| GIC Private Limited | 0 | 9.67% | 10.23% |
| Public | 26.41% | 26.41% | 21.89% |
| Arief Harris Tandjung | 0.43% | 0.43% | 0.35% |
| Standby buyer | 0 | 0.59% | 0.98% |
| Source: Bank Jago's prospectus | |||
Working capital needs
Most of the new fund will be utilised for the bank’s working capital needs, including apps development, apps integration, collaboration with the digital ecosystem, and developing the sharia business. The rest of the capital will support IT and human resources development.
The lender targets SMEs, retail consumers, and the B2B segment, Karim Siregar, president director of Bank Jago said in a press conference on Friday announcing the rights issue.
Currently, the lender has partnered with some digital platforms, including super-app Gojek, besides fintech platforms Akulaku, Kredit Pintar, Akseleran, and the logistics platform Logisly.
“This is how Bank Jago approaches customers. In the future, we see customers will interact through existing apps. Hence, we have to interact with customers on these platforms, so we need to collaborate with the digital players,” Siregar said.
Bank Jago will also target more partnerships with travel sites, e-commerce retailers, entertainment, savings and investment, payment, and insurance platforms. Through these partnerships, the lender will offer financial products such as payments, insurance, and personal finance management.
This year, Bank Jago will launch its own Jago app, and plans to launch Life Finance Solution for wealth investment and develop its sharia business unit.
Bank Jago shares have been one of the best performers in Indonesia this year. The bank’s shares have risen 144% so far in 2021.
Arief Harris Tandjung, deputy president director Bank Jago said this reflects investors’ confidence in the prospects of digital banking in Indonesia.
