(Bloomberg) -- PT Bank Rakyat Indonesia, the country’s most profitable lender, is reviving a plan to sell a stake in its life insurance arm after scrapping a similar process more than two years ago, people with knowledge of the matter said.
The state-controlled firm is asking investment banks to pitch for an advisory role in the next few weeks, according to the people, who asked not to be identified because the information is private. The sale of a minority stake in the unit, known as PT Asuransi BRI Life, could fetch at least $500 million, the people said.
Bank Rakyat canceled an auction process for a 40 percent stake in the business in early 2016, opting to spend more time boosting its value before introducing a foreign partner, people with knowledge of the matter said at the time. The sale had attracted interest from Hong Kong billionaire Richard Li’s FWD Group, South Korea’s Hanwha Life Insurance Co. and BNP Paribas Cardif, the people said.
BRI Life’s net income increased 55 percent last year to 327.67 billion rupiah ($23 million), according to its parent company’s latest annual report. The insurer has more than 7 million customers, the report shows. Deliberations on a potential stake sale are at an early stage, and there’s no certainty they will lead to a transaction, the people said.
The Indonesian insurance industry has attracted interest from foreign investors including Prem Watsa’s Fairfax Financial Holdings Ltd., which bought control of PT Paninvest’s non-life business in 2016 for 2.32 trillion rupiah. Last year, Prudential Financial Inc. agreed to take a 49 percent stake in a life-insurance arm of CT Corp.
Any transaction would add to the $10.4 billion of deals targeting Southeast Asian financial institutions this year, data compiled by Bloomberg show. An official at Jakarta-based Bank Rakyat declined to comment.
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