* Regulator keen for private sector solution but little
* FWD, Prudential, Hanwha approached for investment
* Backdoor listing marred by much confusion, delayed till
* Govt keen to avoid state aid after Bank Century bailout
By Eveline Danubrata and Cindy Silviana
JAKARTA, Dec 22 Indonesian authorities seeking
to shore up troubled life insurer Bumiputera have had little
luck in finding a strategic investor and engineering a backdoor
listing, increasing the likelihood that some form of state aid
may have to be considered.
Despite restructuring under the stewardship of Indonesia's
Financial Services Authority (OJK) since 2013, the century-old
firm still has liabilities of around 20 trillion rupiah ($1.5
billion), more than assets worth 13-14 trillion rupiah,
according to its statutory manager.
Pressure on Bumiputera, formally known as Asuransi Jiwa
Bersama Bumiputera 1912, has begun to mount with plans for its
backdoor listing marred by confusion while there has been no
sign that approaches to foreign insurers are paying off.
Failure to resolve problems for a firm with 6.7 million
policyholders - many of them civil servants - could also pour
cold water on growth prospects for Indonesia's underdeveloped
life insurance sector, where foreign companies have bought
stakes in domestic firms in the last few years.
"A potential government bailout, maybe in part if there
should be some other solutions, might have to be seriously
considered," said Peter Meyer, services committee chair at the
American Chamber of Commerce in Indonesia and who has around 30
years of experience in Indonesia's insurance industry.
Financial authorities stress they are doing their utmost to
make sure Bumiputera's woes are resolved without government
funds, scarred in part by the public furore that erupted over a
taxpayer bailout of lender Bank Century in 2008.
"We are trying our best such that not a single cent has to
come from the government to overcome this," Adhie Massardi,
Bumiputera's OJK-appointed statutory manager, told Reuters.
But he also said state-owned enterprises including insurer
PT Taspen have been sounded out about subscribing to a rights
issue that will be part of the planned backdoor listing.
Taspen is analysing Bumiputera's financial condition and
business prospects but has not made a decision yet, investment
director Iman Firmansyah told Reuters.
Lucky Bayu Purnomo, an analyst at Danareksa Sekuritas, said
he felt a government bailout may be a last resort.
"The government had a bitter experience when it bailed out
Bank Century for 6.7 trillion rupiah. It has to look for other
ways of restructuring."
FAILED APPROACH, CONFUSING PLANS
Foreign companies approached by Bumiputera in the last few
months include Hong Kong's FWD Group, the UK's Prudential Plc
and South Korea's Hanwha Life Insurance Co Ltd
, Massardi and Dumoly Pardede, an official at the
regulator, told Reuters.
FWD walked away from talks with Bumiputera mainly due to
concerns about its liabilities, a person with direct knowledge
of the matter said. A FWD spokesman declined to comment while
Massardi said he had no knowledge of FWD walking away.
Prudential declined to comment, while a spokesman for Hanwha
said there had been no contact from Indonesia about an
investment and it was not considering any such investment.
Bumiputera's muddled backdoor listing through Jakarta-listed
textile materials trader PT Evergreen Invesco Tbk has
also done little to bring investors on side.
Evergreen, which plans to conduct a rights issue to acquire
a holding company set up by Bumiputera, said in September it was
seeking 30 trillion rupiah. It then lifted that to 40 trillion
rupiah before cutting it this month to 10.3 trillion.
Adding to the confusion, Evergreen said in its prospectus
that the stand-by buyer for the offering was Bumiputera itself.
Indonesia's capital market supervisor has since said new
documents about the rights issue do not make mention of this.
Originally slated for end-2016, the rights issue has been
delayed until next year.
Evergreen did not respond to several requests for comment
made by phone and emails.
($1 = 13,465.00 rupiah)
(Reporting by Eveline Danubrata and Cindy Silviana in JAKARTA;
Additional reporting by Sumeet Chatterjee in HONG KONG and Joyce
Lee in SEOUL; Editing by Edwina Gibbs)