BPPNFurther to the joint press release of Bank Indonesia, IBRA, Bank Mandiri and PT Bank Internasional Indonesia Tbk (BII) dated July 2, 2001, the Government and Bank Indonesia are now prepared for the next step in the resolution of BII. Bank Indonesia has held a consultation meeting with the Ministry of Finance and Indonesian Banking Recovery Agency (IBRA), and they concluded that today, July 13, 2001 BII was transferred into Bank Under Recovery (BDP) by IBRA.

This decision is prescribed in Bank Indonesia Governor Decree Nr. 3/8/KEP.GBI/2001 dated July 13, 2001. Bank Indonesia and IBRA confirm that despite the transfer, BII will continue to operate as usual under the new appointed management team. BII will continue to provide all banking services and access to customer accounts, and all BII branches and ATMs will continue to operate normally. The transfer of BII from Bank Indonesia to IBRA is a follow up to the effort to recover BII through an acquisition by Bank Mandiri according to the previously announced plan.

Bank Mandiri has commenced its due diligence process, which will take a period of months before moving to the next stage of the acquisition The transfer of BII from BI to IBRA is an anticipative step taken to enable the administrative transfer of credit “SMG” to IBRA, in accordance with the Government Regulation Nr. 17 Year 1999 on the Indonesian Banking Restructuring Agency, as amended by the Government Regulation Nr. 47 Year 2001 on the Fourth Amendment to the Government Regulation Nr. 17 Year 1999 on the Indonesian Banking Restructuring Agency.

In addition, the Government will try to resolve the issues on BII assets by –among others- asset swap, in order to improve BII balance sheet. Credit “SMG” (non-performing credit) transferred to IBRA will be resolved separately from the bank. The plan for BII’s acquisition by Bank Mandiri will not affect the existence of BII as an independent financial institution, while Bank Mandiri will become one of BII’s shareholders.

The Government and Bank Indonesia confirm that the Blanket Government Guarantee on all public deposits remains in full effect in accordance with the Presidential Decree Nr. 26 Year 1998 on Blanket Government Guarantee on Commercial Bank Liabilities. This guarantee provides an overall security to all public deposits in banks. Therefore the Government and Bank Indonesia request all customers, depositors and debtors, as well as all members of the communities related to BII operations to remain calm, because BII will continue to operate as usual and the steps taken over BII is to enable the bank continuing its activities in a sound manner.

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The second public offering of PT Bank Central Asia Tbk (BCA) shares -- listed at the Jakarta Stock Exchange as BBCA-- owned by the Indonesian Bank Restructuring Agency (IBRA) has been oversubscribed by 30%.

The amount of BCA's shares offered by IBRA through public offering represents 10% of the total shares or 588,800,000 shares, while applications for shares received by the managing underwriter (PT Danareksa Sekuritas) and international selling agent (PT Merril Lynch) has reached approximately 700 million shares.

The high interest is mostly shown by domestic investors followed by foreign investors. Some of the foreign investors who have invested in the Indonesian stock market since pre-crisis time have also subscribed for BCA's shares on quite large amounts.

Market satisfactory responses come along with the result of public offering which reflect positive progress on IBRA's efforts and commitment specifically on the BCA restructuring process, and generally, on the banking sector. The results also provide positive indications on domestic and international confidence on the stock market.

IBRA hopes the results achieved on this BCA shares offering will be a stepping stone to rejuvenate domestic stock market, especially in the banking shares. IBRA received statement of effective action of BCA shares' public offering on 29 June 2001, and the offering period lasted from 4 to 6 July 2001. The result will be free to trade on Tuesday, 10 July 2001.

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