House approval for BCA, Niaga divestment needed<\/p>\n
JAKARTA (JP): The government is seeking approval from the
\nHouse of Representatives (DPR) to divest ownership of publicly
\nlisted Bank Central Asia (BCA) and Bank Niaga this year.<\/p>\n
Secretary of the Financial Sector Policy Committee (FSPC)
\nSyafruddin Tumenggung said here on Monday that the Finance
\nMinistry and Indonesian Bank Restructuring Agency (IBRA) would
\nmeet with House members later this month to obtain approval for
\nthe divestment plans.<\/p>\n
Syafruddin said that divestment of the two publicly listed
\nbanks was in line with the government letter of intent to the
\nInternational Monetary Fund.<\/p>\n
FSPC, which groups several senior economic ministers, oversees
\nthe country's bank restructuring program.<\/p>\n
Syafruddin said that the divestment plan would assist IBRA in
\nachieving its target of raising Rp 18.9 trillion (US$2.26
\nbillion) this year through sales of surrendered assets.<\/p>\n
IBRA, a unit under the finance ministry, has nationalized BCA
\nand Bank Niaga. The agency sold 28.5 percent of BCA through an
\ninitial public offering (IPO) in May raising some Rp 900 billion.<\/p>\n
The agency's divestment of interest in a number of banks
\njoining the government-sponsored recapitalization program is
\nprojected to raise some Rp 3 trillion this year.<\/p>\n
IBRA previously announced it expected to raise some Rp 1.92
\ntrillion from the upcoming BCA and Bank Niaga divestment program.<\/p>\n
Asked about the size of the BCA and Bank Niaga divestment
\nplan, Syafruddin said that the size of the divestment would
\ndepend on the market appetite.<\/p>\n
\"If the market makes it possible for us to divest 100 percent
\nownership, we'll do it,\" he said.<\/p>\n
IBRA has said that it also planned to divest ownership in the
\npublicly listed Bank International Indonesia and Bank Universal
\nthis year.<\/p>\n
But Syafruddin said there was no decision yet whether IBRA
\nwould proceed with the plan or delay.<\/p>\n
Syafruddin said that IBRA was confident of being able to raise
\nthe Rp 18.9 trillion targeted for this year.<\/p>\n
So far the agency has only raised a little more than Rp 4
\ntrillion.<\/p>\n
The agency is responsible for raising the cash to assist the
\nstate to fulfill its interest rate requirements for the
\ngovernment bonds issued to finance the bank recapitalization
\ncosts.<\/p>\n
Syafruddin said that the interest costs for this year alone
\ntotals Rp 76 trillion.<\/p>\n
He said the government had been determined to reduce the state
\nburden by swapping the bonds with performing loans held by IBRA.<\/p>\n
He said that the finance ministry was still designing the new
\nmeasure. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/house-approval-for-bca-niaga-divestment-needed-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}