Indonesia’s biggest lender BRI to acquire two financing firms

Photo by Bank Rakyat Indonesia

Bank Rakyat Indonesia (BRI), the country’s biggest lender by assets, plans to acquire two state financing firms and form a holding company, Finance Minister Sri Mulyani Indrawati said on Monday.

State-controlled BRI will launch a rights issue within about a year to enable the transfer of state pawnshop chain Pegadaian and micro-lending firm Permodalan Nasional Madani (PNM), Sri Mulyani told a parliamentary hearing.

The government will maintain a small stake in the companies with a right to appoint their board of directors, she said.

The government currently controls a 56.75% stake in BRI, while Pegadaian and PNM are entirely state-owned.

The minister said the holding company will allow BRI to provide cheaper source of funds for Pegadaian and PNM, but pledged BRI “will not cannibalize” their businesses.

“The transaction value is still being independently assessed by the public appraisal office,” said Sri Mulyani.

BRI, Pegadaian and PNM did not respond to requests for comment.

Pegadaian President Director Kuswiyoto told lawmakers in a separate hearing on Monday the acquisition could help his firm cut costs and improve its network in more remote areas, according to media reports.

The plan is subject to parliamentary approval.

As of September, Pegadaian’s total assets were 70.88 trillion rupiah ($5.06 billion) and PNM’s were 26.45 trillion rupiah.

Last year, State-Owned Enterprises Minister Erick Thohir said the government was exploring synergies between the three companies.

Hit by the coronavirus pandemic, BRI reported 18.66 trillion rupiah of net income in 2020, down 45.78% from a year earlier, company data showed. Its assets were worth 1,511.8 trillion rupiah.

Reuters

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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.