27 Juli 2018
Strategic Investment by KB Kookmin Bank Ltd. in PT. Bank Bukopin Tbk through the issuance of new shares in Rights Issue
KB Kookmin Bank
As the largest bank by total loans and the leader in household loans in Korea, KB Kookmin Bank currently has the biggest customer base in Korea covering over 60% of Korea’s total population and the largest market share in the internet banking. As of June-2018, KB Kookmin Bank’s total asset was 348.7 trillion KRW. KB Kookmin Bank has expanded globally with presence in 10 countries, including offices in New York, London, Tokyo and Hongkong.
KB Kookmin Bank is wholly-owned by KB Financial Group (“KBFG”), a leading Korean financial services group offering a broad range of financial products and services. As of June-2018, KBFG’s total asset was 463.3 trillion KRW. KBFG is listed in NYSE and KRX with a market cap of KRW 20.5 trillion.
PT Bank Bukopin Tbk
Founded in 1970, PT Bank Bukopin Tbk (“BBKP”) is one of medium-size indonesian private bank that covers individuals, cooperatives, enterprises, State Owned Enterprises (“BUMN”) and government institutions customers. BBKP divides its business segments into retail business (micro, SME and consumers) and commercial. Retail segments are their focus while commercial segment is expected to be their balancer. As of July 2018, BBKP had 43 branch offices, 175 sub-branch offices, 104 cash offices, 22 payment points, 8 pickup service, and 867 ATMS nationwide. According to BBKP’s research, BBKP ranks 12th among Indonesian banks in term of assets.
BBKP will maintain its business activity on funding, lending and fee-based income through strategies that focus on areas such as performance enhancement, qualified asset growth, deposit structure, profit based on economic scale optimization, developing digital banking product and collaborating with fintech industry. As of June-2018, BBKP’s total asset was IDR 91.6 trillion and total equity of IDR 7.2 trillion.
Avantgarde Capital acted as buy-side financial advisor to KB Kookmin Bank in the strategic investment in PT Bank Bukopin Tbk through the issuance of new shares in Rights Issue.
Avantgarde assisted and advised KB Kookmin Bank from the origination to the closing of the transaction. We assisted KB Kookmin Bank in initiating specific ideas and approaching the potential target, providing valuable insights on the target and the shareholders’ intention, structuring and proposing various possible transaction structures which may optimally achieve the client’s objectives, formulating strategy and approach based on our local knowledge and experience and acting as point of contact or liaison in communications with the Target and the key Shareholders. In addition, we coordinated the due diligence process and other professional advisers (auditor, tax, and legal advisers) and managed the workstreams to ensure the transaction was well executed and met the very tight set timetable. We also played an instrumental role in liaising with the Indonesian banking sector and capital markets authorities (OJK) and in the negotiation of key terms and conditions of the agreements until the successful completion of the transaction.