Standard Chartered has become the first foreign bank to take a strategic stake in an Indonesian bank, agreeing to pay about double what it had expected when its interest was first revealed last April.
Chartered has entered into partnership with the Indonesian Bank Restructuring Agency (Ibra) and agreed to pay GBP86 million (about HK$1.05 billion) for up to 20 per cent in Bank Bali, a small consumer bank.
As part of the deal, described as 'the first of its kind', Chartered has been granted effective management control and has the right to buy up to 100 per cent of the bank's shares over five years - or sell them back to Ibra.
Ibra is to take on the worst of Bank Bali's non-performing loans, while agency officials and Chartered executives will make up its management and supervisory boards.
The deal means the Ramli family, which had held 30 per cent of the bank, is expected to see its stake substantially reduced.
Under a new investment agreement, Bank Bali is to launch a 4.3 trillion rupiah (about HK$4.78 billion) rights issue, in which Ibra will act as 'stand-by buyer', and Chartered will be allowed to take up to 20 per cent of any new shares unsubscribed.
