Bad debtors face tougher measures<\/p>\n
JAKARTA (JP): Finance Minister Bambang Subianto vowed on
\nTuesday to take tougher measures against the worst debtors of
\ndomestic banks who fail to reach a loan recovery plan by the end
\nof this month with the Indonesian Bank Restructuring Agency
\n(IBRA).<\/p>\n
He expected the first batch of bad debtors to make significant
\nprogress at their talks with the agency in one month's time.<\/p>\n
"There are more drastic measures that we won't use right now
\nbecause we're still hoping for the good will of the debtors to
\nnegotiate (for a loan workout strategy )," he told a press
\nconference.<\/p>\n
"We will at least make a review on several of the worst
\ndebtors this month, and another batch next month," he added.<\/p>\n
Many have doubted whether IBRA could recover the massive
\namount of nonperforming loans both at state banks and private
\nbanks now controlled by the government as the debts are mostly
\nowed by well-connected businessmen.<\/p>\n
The government has also been criticized for its slowness in
\nrecovering bad debts, raising speculation that it has surrendered
\nto pressure from the businessmen.<\/p>\n
Bambang's comments followed IBRA's announcement earlier in the
\nday of the top 200 worst debtors. IBRA controls nonperforming
\nassets of 25 major banks, including seven state banks. The
\nagency also manages all the assets of the closed private banks.<\/p>\n
IBRA said in several newspaper advertisements which listed the
\nworst debtors, that it was inviting the debtors to continue or
\nstart renegotiation with the agency on how to recover
\nnonperforming loans.<\/p>\n
"These debtors which have not yet started talks are urged to
\nsend a formal letter to the agency to ask for a meeting to
\ndiscuss their obligations," IBRA said.<\/p>\n
IBRA corporate secretary Christovita Wiloto said that the 200
\ndebtors in the agency's list were the worst among the 1,700
\ndebtors with total nonperforming loans of over Rp 150 trillion
\n(US$18.75 billion) now in the hands of IBRA.<\/p>\n
The agency, however, didn't disclose the amount of bad debts
\nof the 200 debtors nor the owners of the indebted companies.<\/p>\n
The IBRA list included companies owned by the family of former
\npresident Soeharto and its cronies as well as other large
\nbusiness groups.<\/p>\n
Car maker PT Timor Putra Nasional, the controversial car
\nproject of Soeharto's youngest son Hutomo "Tommy" Mandala Putra,
\nwas the second worst debtor after PT Gerak Maju, a unit of the
\nMantrust Group.<\/p>\n
According to the May 17 issue of the Warta Ekonomi weekly,
\nTimor has some Rp 3.4 trillion in debts.<\/p>\n
The other Soeharto-linked indebted companies include
\npetrochemical center PT Chandra Asri, satellite operator PT
\nPacific Satelit Nusantara, textile company PT APAC Inti Corpora
\nand port operator PT Humpuss Terminal Petikemas.<\/p>\n
Other debtors are companies owned by Soeharto's cronies
\nincluding Mohammad Bob Hasan and Prajogo Pangestu.<\/p>\n
Companies owned by the country's conglomerates include the,
\nBakrie Group, Lippo Group, and the Tirtamas Group are also
\nincluded on the list.<\/p>\n
Aircraft maker PT IPTN, the pet project of President B.J.
\nHabibie when he was minister of research and technology, was
\nlisted as the 23rd worst debtor.<\/p>\n
Several banks including state banks also disclosed in separate
\nnewspaper advertisements the lists of the largest borrowers with
\nsubstandard and doubtful debt categories. The loan workout
\nstrategy of these debt categories is being handled by each of the
\nbanks.<\/p>\n
The list of 164 of the worst debtors issued by state-owned
\nBank BNI included business units of the Texmaco Group and PT
\nAstra International.<\/p>\n
Another state-run bank, Bank BRI, issued its 193 worst
\ndebtors, and nationalized Bank BCA also listed its top 21
\ndebtors. Other smaller banks also released their lists of
\ndebtors.<\/p>\n
Bambang said that the publication of the list of the worst
\ndebtors as well as the other groups of debtors were meant to show
\nthe seriousness of the government to get tougher on the
\nrecalcitrant debtors in recovering loans.<\/p>\n
He denied allegations that the government was moving slow in
\nrecovering the nonperforming loans and had acquiesced to
\npressures from well-connected businessmen.<\/p>\n
He pointed out that the government had been preoccupied in the
\npast year with preparations for the massive bank restructuring
\nprograms.<\/p>\n
Bambang said that the recovery of nonperforming loans as well
\nas the other type of loans were vital to minimize the cost of the
\ngovernment bank recapitalization program.<\/p>\n
He added that loan recovery or restructuring would improve the
\nperformance of banks and lessen recapitalization
\ncosts. (rei\/rid\/cst)<\/p>",
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