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January 15, 2008 |
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BANK LIPPO: CIMB to Disclose Findings From Merger Study CIMB group, which is currently conducting a feasibility study on Khazanah Nasional Bhd's proposed merger of its Indonesian banks, PT Bank Niaga and PT Lippo Bank Tbk, expects to disclose results in the first quarter this year, various reports say. Group Chief Executive Datuk Nazir Razak told The Star Online News that details such as the execution process needed to be ironed out. Mr. Razak was quoted by The Edge Daily News as saying, "It shouldn't take too long. We will hear something in terms of the next step we have to take, in the first quarter this year." Mr. Razak did not expect Bank Indonesia to reject the merger proposal. As reported by the Troubled Company Reporter-Asia Pacific on Dec. 19, 2007, Khazanah Nasional is looking into the possibility of merging Lippo Bank and Bank Niaga given the synergy involved, and also to comply with Indonesia's single presence policy. Under Bank Indonesia's single-presence policy, foreign parties cannot own a controlling stake in more than one Indonesian bank and must submit statements of compliance to this rule. Currently, Khazanah has an indirect equity interest of approximately 93% in Bank Lippo, through Santubong Investments BV and Greatville Pte Ltd, and an indirect equity interest of approximately 64% in Bank Niaga through Bumiputra-Commerce Holdings Berhad. Yong Yen Nie of The Edge writes that Mr. Nazir said the banks have very good fit with each other, and they have gone some distance in realizing the synergies between CIMB and Niaga. With Lippo Bank coming into the equation, the prospects are even greater, he added. Mr. Nazir also said, The Star relates, CIMB group was excited about the merger of both banks. In fact, this proposed merger was even contemplated by previous shareholders of the two banks without the single-presence policy, he added. About Bank Lippo Headquartered in Jakarta, Indonesia, PT Lippo Bank Tbk -- http://www.lippobank.co.id/ -- offers two product segments: Consumer Products, comprised of personal accounts, debit cards, distribution cards, VIP banking, credit cards, loans, bancassurance, payment services, loyalty programs and safe deposit boxes, and Corporate Products, consisting of LippoKredit, LippoTrade, LippoGiro, LippoDeposit, e-LippoLink and MFTS. The bank is supported by 134 branch offices, 21 sub branch offices, 238 cash offices and four payment service offices nationwide. The Troubled Company Reporter-Asia Pacific reported on Oct. 19, 2007, that Moody's Investors Service raised the foreign currency long-term debt and foreign currency long-term deposit ratings of PT Lippo Bank Tbk. The detailed ratings are: -- The issuer/foreign currency subordinated debt ratings were raised to Ba2/Ba2 from Ba3/Ba3 and foreign currency long-term deposit rating to B1 from B2. -- The Not Prime foreign currency short-term deposit rating and D BFSR were unaffected. On Sept. 11, 2007, Fitch Ratings upgraded the Individual Ratings of PT Bank Lippo Tbk to 'C/D' from 'D. At the same time, the agency upgraded Bank Lippo's National Long-term Rating to 'AA-' from 'A+'. The Outlook remains Stable. All other ratings have been affirmed: * Long-term foreign currency IDR at 'BB-' with Positive Outlook, * Short-term foreign currency Rating at 'B', * Support Rating at 4 and Support Rating Floor at 'B', On July 12, 2007, Standard & Poor's Ratings Services assigned 'B+' long-term and 'B' short-term counterparty credit ratings to Indonesia-base Lippo Bank. The outlook is stable. Standard & Poor's also assigned its 'D' bank fundamental strength rating to the bank. At the same time, Standard & Poor's assigned its 'B-' issue rating to Lippo Bank's US$200 million subordinated notes due in 2016. The differential between the 'B+' counterparty credit rating on Lippo Bank and the 'B-' rating on its subordinated notes reflects the subordinated feature of the notes. |
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