Foreign investors show interest in IBRA loan assets<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
More than 140 investors, including foreign financial
\ninstitutions, have expressed interest in purchasing bank loan
\nassets worth more than Rp 150 trillion (about US$17 billion),
\nheld by the Indonesian Bank Restructuring Agency (IBRA), now on
\noffer for sale.<\/p>\n
IBRA deputy chairman for Asset Management Credit (AMC)
\nMohammad Sjahrial said on Thursday that around one-third of the
\nprospective buyers were foreigners, including high-profile names
\nsuch as Morgan Stanley Dean Witter & Co., Lehman Brothers
\nHoldings Inc., Credit Suisse First Boston Corp., JP Morgan, and
\nSolomon Smith Barney Inc.<\/p>\n
He was quoted by Dow Jones as saying that local investors that
\nhad expressed interest included state-owned Bank Mandiri,
\nDanareksa Securities and Bank Central Asia (BCA).<\/p>\n
IBRA officially launched its largest-ever asset sale program
\nearlier this week.<\/p>\n
The loans, both unrestructured nonperforming loans (NPLs) and
\nrestructured ones, are owed by some 2,500 debtors. The agency
\ntook over some Rp 250 trilion worth of NPLs from closed-down and
\ntroubled banks in the late 1990s.<\/p>\n
IBRA expects to get a recovery rate of around 30 percent from
\nthe loans.<\/p>\n
The presence of respectable firms in the sale of the loan
\nassets should provide relief for the agency, as this will
\nincrease the level of bidding competition, and thus produce make
\nrespectable proceeds.<\/p>\n
No less than Syafruddin Temenggung, the agency's chairman, has
\npledged not to accept low bids from any investor.<\/p>\n
Many, including the IMF, doubt that IBRA could raise enough
\ninterest in the loan asset sales partly because the agency has
\ncombined the sale of restructured and unrestructured NPLs.<\/p>\n
The IMF has said that to appeal to foreign investors'
\nappetites, IBRA should sell the loan assets in packages, rather
\nthan individually. The agency rejects this demand, arguing that
\nselling the loans in packages would cause IBRA to only get a low
\nrecovery rate.<\/p>\n
IBRA has said the sale process would be carried out through a
\ndirect sale and auction mechanism, with the agency hoping to
\ncomplete it by Aug. 22.<\/p>\n
However, those who purchase the loan assets must not be
\naffiliated to the original debtors and therefore must sign a
\n\"nonconflict\" of interest letter to avoid old debtors from buying
\nback their assets.<\/p>\n
The loans are made up of commercial and corporation loans.
\nCommercial loans are those worth Rp 5 billion to Rp 50 billion,
\nwhile those above Rp 50 billion are categorized as corporate
\nloans.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/foreign-investors-show-interest-in-ibra-loan-assets-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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