Indonesia Digital Bank Rights Issue Attracts Grab Subsidiary Carro, Other Supporters

Car marketplace Carro, a subsidiary of food delivery platform Grab, is among several companies slated to participate in a 4.8-trillion-rupiah (about $334 million) rights issue by Indonesian digital lender Allo Bank, Reuters reported Wednesday (Jan. 5).

eCommerce firm Bukalapak.com, conglomerate Salim Group, online travel startup Traveloka and Growtheum Capital Partners are also joining, according to the report.

Allo Bank, which is controlled by Indonesian tycoon Chairul Tanjung, is slated to sell more than 10 billion shares at 478 rupiah (about 3 cents) each Jan. 13-19, the report stated, citing Allo Bank’s rights issue prospectus filed to the stock exchange Monday (Jan. 3).

Tanjung’s Mega Corpora will increase its investment in Allo by 1.3 trillion rupiah (about $90.4 million) through the rights issue, according to the report. Bukalapak.com has agreed to buy 1.2 trillion rupiah (about $83 million) of Mega Corpora’s preemptive rights, and Salim Group’s Indolife Investama Perkasa will buy 623 billion rupiah (about $43 million) worth of shares.

Mega Corpora also sold its rights to Abadi Investments, H Holdings, Trusty Cars and CT Corpora in preparation for the rights issue sale next week, the report stated. At the conclusion of the rights issue, Allo Bank’s core capital will increase to more than 6 trillion rupiah (about $417 million).

Allo Bank will now have access to customers and merchants in retail, commerce, ride hailing and delivery, travel and autos through the rights issue, according to the report. The bank got its digital banking permit last year, putting it in competition with the digital units of Bank Central Asia and Bank Rakyat Indonesia, as well as tech firm GoTo’s Bank Jago, FinTech AkuLaku’s Bank Neo Commerce and Singapore-based Sea’s SeaBank Indonesia.

Last month, the Bank of Indonesia unveiled a new retail payments system that BI Governor Perry Warjiyo promised will decrease the cost of money transfers while also supporting the ongoing growth of the digital economy across the nation.

Read more: Bank of Indonesia Debuts New Retail Payments System