Jan 25, 2011

Govt. places Bank Mandiri at Rp5,250

One of Indonesia’s largest banks, PT Bank Mandiri Tbk (BMRI) and Ministry of State-Owned Enterprises have determined the rights issue at Rp5,000 per share, a 11.50% discount from today's market closing at Rp5,650 per share. Demand for the shares is estimated to obtain 3.5%-3.6% oversubscribe.
Referring to the price, Bank Mandiri will enable to snap up Rp11.70 trillion cash from the rights issue of B series shares. The bank aims to issue 2.34 billion shares or 11.14% shares of its enlarged capital.
Each holder of 8,985 shares has 1,000 preemptive rights to buy a new share that will be issued by the lender.
On the other hand, PT Mandiri Sekuritas and PT Danareksa Sekuritas act as the right issue’s underwriters as well as standby buyers for 778.69 million shares that weren’t owned by the government’s portion.
The government has also decided to place Bank Mandiri shares at Rp5,250 per share. It will not exercise 1.56 billion preemptive rights. Based on a purchase agreement signed on December 23 2010, the rights will be transferred to Danareksa and Mandiri Sekuritas. Furthermore, they will sell and offer the rights to foreign and domestic investors.
According to the plan, Bank Mandiri will allocate the fund of right issue to strengthen its capital structure that support its business development and credit growth in the future. 

Disclosure: No position at the stock mentioned above.

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