JAKARTA- 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.($1 = 13,995.0000 rupiah)
(Reporting by Tabita Diela, Gayatri Suroyo; Editing by Ed Davies) ((tabita.diela@thomsonreuters.com; +628111135032;))
