GIC to buy shares worth up to $225m in Gojek-backed Bank Jago

GIC, the sovereign wealth fund of Singapore, is set to purchase up to US$225 million of shares in Indonesian banking and financial services firm Bank Jago, according to a disclosure made to the Indonesia Stock Exchange.

The amount would net GIC an approximate 9% stake in the company, which is set to increase its capital through a rights issue scheduled to run in March this year.

Photo credit: Gojek

Bank Jago will issue 3 billion in new shares at a price of 2,350 rupiah (US$0.16) apiece. The Gojek-backed company will secure 7 trillion rupiah (US$497.3 million) in the issuance, increasing its total capital to 8 trillion rupiah (US$564.4 million).

With GIC’s injection, shares of existing stakeholders Metamorfosis Ekosistem Indonesia (Bank Jago’s main shareholder), Dompet Karya Anak Bangsa (the formal entity of Gojek’s e-wallet GoPay), and Wealth Track Technology will be diluted.

Bank Jago approximates it will use 97% of the capital for business expansion, while 2% will go to IT infrastructure investments and 1% to human resources development.

In December last year, Gojek increased its stake in the firm to 22% as part of a strategic tie-up that aims to offer financial services to merchants and drivers in the country. The deal saw the Indonesian internet titan pay 1,150 rupiah per share for a total price of over 2.2 trillion rupiah (US$159 million).

Meanwhile, another regional giant, Shopee, recently acquired Indonesia’s Bank Kesejahteraan Ekonomi, aiming to turn the financial services company into a digital bank.