Danamon to Hold Rights Issue

VIVAnews - PT Bank Danamon Tbk is optimistic that the Rp 4 trillion (US$342.2 million) rights issue can be absorbed despite the fluctuating stock market.

The BDMN-coded bank has been granted commitment from Danamon's major share holder, Asia Financial Pte Ltd. 
 
Bank Danamon Director of Finance, Vera Eve Lim, said the share holders have agreed to acquire their shares.

"Citi Group Global Markets and Morgan Stanley will act as stand-by buyers during the rights issue," she said during a general meeting of shareholders on Monday, March 23.

The rights issue fund, she went on to say, will increase core capital from 13.8 percent to 19.2 percent. Meanwhile, capital adequacy ratio will rise from 15.4 percent to 20.8 percent.
 
In addition, the rights issue fund will be utilized to support the growth of credit disbursement, especially micro and medium business credit as well as automotive financing in the years to come.

In the rights issue, every holder of 102 shares of A-type and B-type has the right to gain 67 early orders for securities.
 
She denied that the rights issue fund will be used for financing subordinated bonds valuing US$150 million. "The bonds will be settled in March 2009, while the rights issue fund will have only been received by April," she said.

She also refused the story that the rights issue will be allocated to acquire PT Adira Dinamika Multifinance Tbk. For the time being, bank's liquidity reached Rp 15 trillion (US$1.2 billion), which is enough for the acquisition.
 
"The rights issue fund will be fully used for business expansion," she said.

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Translated by: Bonardo Maulana Wahono