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JAKARTA, Dec 30 (Reuters) - A scheme to prop up Indonesian life insurer Bumiputera has taken a new twist, with Evergreen Invesco - the planned vehicle to rescue the century-old firm - scrapping a rights issue and instead gaining the backing of a prominent local tycoon.
Evergreen, a small textiles trading company, has agreed to acquire a holding company set up by Bumiputera but will now issue promissory notes to a consortium led by businessman Erick Thohir, an official with Indonesia's Financial Services Authority (OJK) told a news briefing.
The new plans aim to provide a private-sector solution for the troubled firm with 6.7 million policyholders, as the government is determined to avoid using taxpayer funds after a previous bailout for a bank in 2008 led to much public ire.
"(Thohir) said he saw the name Bumiputera and thought it still has an immense value. He is interested in heading the restructuring process," Firdaus Djaelani, chief supervisor of non-bank financial institutions at OJK.
Thohir, best known for being president of soccer club Inter Milan, could not immediately be reached for comment. Representatives for Evergreen could also not be reached for comment.
Despite OJK-led restructuring since 2013, Bumiputera, known formally as Asuransi Jiwa Bersama Bumiputera 1912, still has liabilities of around 20 trillion rupiah ($1.5 billion), compared with assets of 13-14 trillion rupiah.
The 5-year promissory notes set to be issued next month will aim to raise 3.2 trillion rupiah, said Didi Achdijat, one of the OJK-appointed statutory managers for Bumiputera - much smaller than sums mooted with the rights issue.
Plans for the rights issue had, however, been very muddled, finding little favour with investors.
Evergreen first 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.
The consortium led by Thohir will also invest in an affiliate of Bumiputera that will sell new insurance products, while Bumiputera will continue serving its policyholders until their claims come due, Achdijat said.
Bumiputera had sounded out some foreign insurers for a strategic investment. Achdijat said, however, that foreign interest in the firm had waned after Bumiputera was not able to secure bancassurance contracts with lenders.
$1 = 13,432.0000 rupiah $1 = 13,470.0000 rupiah Reporting by Cindy Silviana; Additional reporting by Gayatri Suroyo; Editing by Ed Davies and Edwina Gibbs