Bank Mandiri’s Statement Regarding the Pledge of JARR and PGUN Shares

REPUBLIKA.CO.ID, JAKARTA — Trioksa Siahaan, Senior Vice President and Head of Research and Product Development at the Indonesian Banking Development Institute (LPPI), Trioksa Siahaan, considers the use of shares in PT Pradiksi Gunatama Tbk (PGUN) and PT Jhonlin Agro Raya Tbk (JARR) as additional collateral for Bank Mandiri loans to be a common practice in corporate financing. This assessment is based on the generally accepted principles of banking finance governance in Indonesia.

“The use of shares as collateral is common practice in corporate finance. However, banks need to consider various aspects through adequate credit analysis, including an assessment of the shares being used as collateral. In this way, shares can serve as one of the instruments facilitating access to financing,” he said on Tuesday (20 October 2026).

According to Trioksa, the use of shares as additional collateral can facilitate access to finance provided it is underpinned by an adequate credit assessment, including consideration of the market value of the shares and their liquidity. Regular evaluations are essential to anticipate the risks of market fluctuations.

He emphasised that a fall in the price of pledged shares does not automatically indicate a deterioration in credit quality. The borrower’s ability to generate cash flow to meet payment obligations remains the primary consideration.

“A fall in share prices does not automatically mean that credit quality has deteriorated, as the borrower’s ability to generate cash flow to meet their obligations remains the primary consideration,” he said. This principle of prudence is consistently upheld by the national banking sector.

Regarding Bank Mandiri’s loans secured by PGUN and JARR shares, Trioksa believes that the price movements of both shares need to be monitored regularly. This close monitoring is particularly important to assess the adequacy of the collateral’s value and liquidity should a large volume of shares need to be liquidated.

By way of illustration, the market value of the pledged shares is estimated to have reached around Rp 73 trillion at one point. Assuming a loan value of Rp 26.1 trillion, the loan-to-value (LTV) ratio is estimated to be around 36 per cent.

This figure is an estimate based on the assumed loan value, not the actual confirmed value of the credit facility. Changes in share prices may affect the value of the collateral and the LTV ratio at any time.

To ensure the adequacy of collateral, Trioksa noted that banks may carry out periodic revaluations. Furthermore, banks also need to apply risk-based adjustments to the value of collateral (haircuts) and conduct stress tests to assess scenarios involving a fall in share prices.

Should the value of the collateral no longer meet the requirements set out in the loan agreement, the bank may assess the need for additional, more liquid and stable collateral. Another alternative is to adjust the credit exposure based on the results of an objective valuation.

“Furthermore, banks simply need to ensure the quality of alternative collateral, the adequacy of cash flow, and compliance with the credit agreement,” concluded Trioksa. A commitment to these risk management principles will safeguard the stability of the banking sector’s performance going forward.