Indonesia's BRI to raise $1b in rights issue

It wants to strengthen its capital base for possible acquisitions.

Bank Rakyat Indonesia (BRI) is looking to raise at least $1b through a rights issue which could take place as soon as H1 2021, reports Bloomberg.

The bank wants to bolster its capital base to prepare for potential acquisitions with the proceeds. Deliberations are ongoing and BRI could still adjust the fundraising structure or even decide not to proceed, sources said.

The planned fundraising comes after the lender signed a conditional deal with Bank Mandiri and Bank Negara Indonesia to combine their Shariah-compliant units that could form an entity whose assets could reach $27.99b (IDR390t) by 2025.

Separately, the Indonesian government wants BRI to work with state-owned pawnshop chain Pegadaian and financing firm Permodalan Nasional Madani to provide affordable financing for small and medium enterprises, the country’s minister of state-owned enterprises told local media last month.

Here’s more from Bloomberg.