BCA's plan to buy IBRA assets must be monitored: Bappenas<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Plans by Bank Central Asia (BCA) to purchase bank loans held by
\nthe Indonesian Bank Restructuring Agency (IBRA) must be closely
\nmonitored as the transaction could only benefit the new owners of
\nthe bank at the expense of taxpayers, according to a statement
\nissued late on Wednesday by the Office of the State Minister of
\nNational Development Planning\/Bappenas.<\/p>\n
The statement said that the public must be made aware that if
\nIBRA sold the loan assets at a huge discount, it was the taxpayer
\nwho would shoulder the loss.<\/p>\n
It added that IBRA must disclose the selling price of the
\nloans.<\/p>\n
The management of publicly-listed BCA announced earlier this
\nweek that it intended to exchange some Rp 10 trillion worth of
\ngovernment bonds held by the bank with the IBRA loan assets.<\/p>\n
BCA is now controlled by a consortium led by U.S. investment
\nfirm Farallon Capital, which bought a 51 percent stake in March
\nfrom the government for Rp 5.3 trillion.<\/p>\n
BCA currently holds nearly Rp 60 trillion-worth of government
\nbonds, which was injected in the late 1990s to recapitalize the
\ngiant retail bank. The state budget covers the interest rate of
\nthe bonds, which has been one of the main source of revenue for
\nthe bank.<\/p>\n
The government had been previously criticized for selling the
\nnationalized bank to a new private owner without first unloading
\nthe huge bonds.<\/p>\n
\"The value of (the government) bonds transferred into the
\nhands of the private buyers of BCA is six times the price of the
\nBCA acquisition,\" the Bappenas statement said.<\/p>\n
\"These bonds can be used to purchase the IBRA (loan) assets at
\na price much lower than the book value of the assets when first
\ntransferred to IBRA.\"<\/p>\n
\"So the assets bought by BCA could potentially multiply in
\nvalue at the expense of IBRA because (the latter) has sold them
\nto BCA at a very low recovery rate. The difference is a loss
\nborne by the people.\"<\/p>\n
IBRA took over more than Rp 200 trillion-worth of
\nnonperforming loans from ailing banks in the late 1990s. The
\nagency is mandated to restructure and sell back the loans to
\nraise cash to help finance the state budget deficit.<\/p>\n
The agency said on Tuesday that it planned to sell up to Rp
\n150 trillion-worth of bank loans this year.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bcas-plan-to-buy-ibra-assets-must-be-monitored-bappenas-1447893297",
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