Aug 12, 2010

BNI green shoe offered at Rp2,900

Green shoe shares or public shares that the government still owns in publicly listed PT Bank Negara Indonesia Tbk (BNI) are divested at Rp2,900 per share minimum or 3.33% discount from yesterday market price of Rp3,000. 
To realize the green shoe divestiture, the government has named Bahana Securities, Mandiri Sekuritas, Danareksa Sekuritas, and Macquarie Securities as the underwriters. 
Director of Bahana Securities Eko Yuliantoro, as reported by Bisnis Indonesia today revealed the government had decided to divest the green shoe shares, faster than September 2010 scheduled. 
"The price has been determined at a minimum of Rp2,900 per share, which is lower 3.33% of the market price of Rp3,000 per share," he informed yesterday. 
In the meantime, State Minister for State-owned Enterprises Mustafa Abubakar explained the ministry indeed planned to discount the green shoe share price. He hoped the government could raise a fund of more than Rp1.2 trillion from the divestiture. 
The green shoe share volume reaches 473.89 million shares or 4.14% of the total shares volume issued by the state lender. 
Referring to the price of Rp2,900 per share, the government is predicted to raise a fund of at least Rp1.372 trillion or not too different from what Mustafa Abubakar had calculated. 
The fund would be used to inject more funds to the 2010 State Budget and would not go to the company's coffers. 
Deputy State Minister for State-owned Enterprises (SOEs) for Banking and Financial Service Parikesit Suprapto confirmed the divestiture of green shoe shares was indeed faster than September scheduled. 
"The decision to divest the green shoe shares is indeed quite all of a sudden. Previously, the green shoe shares will be divested in September. We will leave the price problem to the securities firms appointed to handle the divestiture," told Parikesit.
A capital market analyst Satrio Utama viewed Rp2,900 was a fair price for BNI shares. Besides, the investment was long-term investment, which would not sell the shares in the near time. 
"The price is fair since it is not too different from the current price. Besides, green shoe shares are indeed for long-term investments." 
According to him, the corporate action would make BNI share price movement steady and less volatile. 
"The impacts on the performance of the bank itself are zero. What is affected is trade volume. Since the volume of outstanding shares will be bigger, the stock will be less volatile." 

Disclosure: No position at the stock mentioned above.

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