IBRA and IMF differ on Bank Niaga divestment plan<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The International Monetary Fund (IMF) said the sale of the
\ngovernment's 51 percent stake in publicly listed Bank Niaga
\nshould be carried out as scheduled, although the government has
\nhinted that it might back down from the plan if the prices
\noffered by bidders were too low.<\/p>\n
IMF senior advisor for Asia Pacific Daniel Citrin, who heads
\nthe visiting IMF delegation to the country, said that there was
\nno change in the schedule for the sale of the medium-sized bank.<\/p>\n
"We are committed to selling it within a competitive and
\ntransparent procedure. There is no change in targets," he said on
\nMonday.<\/p>\n
Separately, however, the Indonesian Bank Restructuring Agency
\n(IBRA) said that it might scrap the plan should the bidders offer
\na price tag that falls far below the market price.<\/p>\n
"The government will not sell the majority stake if the final
\nbid is below half the market price," I Nyoman Sender, IBRA deputy
\nchairman for the bank restructuring unit, said.<\/p>\n
His remarks followed an announcement that Niaga's bidders had
\nsubmitted their offers on Monday at a maximum of only about one-
\nthird of Niaga's share price.<\/p>\n
Nyoman said the bids from the four short-listed bidders were
\nin the range of Rp 15 to Rp 25 per share.<\/p>\n
On Monday, the share price of Bank Niaga dropped to Rp 80.<\/p>\n
In its bid to consolidate the country's banking sector, whose
\nperformance has been disappointing, and to raise cash to help
\nfinance the state budget, IBRA plans to sell a controlling stake
\nin Bank Niaga in a process it hopes to be completed by June.<\/p>\n
IBRA expects the final bid for the Bank Niaga stake to be made
\non May 27.<\/p>\n
Restructuring the banking sector is an important part of the
\ncountry's economic reform package agreed to with the IMF.<\/p>\n
There are currently four bidders for the Bank Niaga stake, two
\nof which are a foreign-led consortia.<\/p>\n
The four are a consortia led each by Australia & New Zealand
\n(ANZ) Banking Group Ltd., Malaysian financial group Commerce
\nAsset-Holdings Berhad, Bank Victoria International and Batavia
\nInvestment Fund.<\/p>\n
Asset-Holdings Group owns Malaysia's third largest banking
\ngroup Bumiputera-Commerce.<\/p>\n
Batavia Investment Fund is an Indonesian-based fund and was
\npart of a consortia led by Singapore's Cycle & Carriage (C&C),
\nwhich won the bid for about 40 percent of auto giant Astra
\nInternational two years ago. C&C now holds 32 percent of Astra.<\/p>\n
The government, through IBRA, holds 97.15 percent of Bank
\nNiaga.<\/p>\n
Niaga's sale comes after IBRA successfully completed the
\ndisposal of the long-stalled 51 percent of BCA last month, with a
\nconsortium, led by U.S.-based investment firm Farallon Capital,
\nemerging victorious.<\/p>\n
Getting credible investors from the divestment of local banks
\nhas been the government's priority in helping revive confidence
\nin the banking industry.<\/p>\n
Moreover, the government could use part of the proceeds to
\nhelp cover the 2002 state budget deficit, which is projected to
\nstand at about Rp 42 trillion (about US$4.6 billion).<\/p>\n
The agency has been targeted to collect Rp 42.8 trillion from
\nstate asset sales this year.<\/p>\n
The bank managed last year to post Rp 41.1 billion in net
\nprofit in the first ever positive balance sheet since the
\ndevastating financial crisis struck in 1997.<\/p>\n
Also last year, the bank's credit adequacy ratio (CAR) stood
\nat 18.7 percent, while its non-performing loans reached 9.75
\npercent.<\/p>",
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