IBRA defends MSAA extension<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The Indonesian Bank Restructuring Agency (IBRA) has claimed
\nthat the controversial extension of the Master of Settlement and
\nAcquisition Agreement (MSAA) is necessary to restart faltering
\ndebt payments from former bank owners.<\/p>\n
IBRA chairman I Putu Gede Ary Suta said that without the
\nruling, which received the backing of the powerful Financial
\nSector Policy Committee (FSPC), the government might never get
\nits money back.<\/p>\n
\"We needed this breakthrough decision to get them (bank
\nowners) to start repaying their debts,\" he told reporters on
\nThursday.<\/p>\n
The MSAA deal was signed in 1998 between IBRA and former bank
\nowners, including the Salim Group, former owner of nationalized
\nBank Central Asia (BCA), Sjamsul Nursalim (of the defunct Bank
\nBDNI), Bob Hasan (of the defunct Bank Umum Nasional) and
\nSudwidkatmono (of Bank Subentra).<\/p>\n
Their banks were among those that received Bank Indonesia
\nliquidity emergency loans worth Rp 144.5 trillion (about US$14.2
\nbillion) at the peak of the 1998 financial crisis.<\/p>\n
In an effort to recoup the public funds, IBRA and the owners
\nof the banks signed a deal known as the MSAA.<\/p>\n
The deal is valid for four years and is due to expire in 2002.<\/p>\n
But Ary Suta said that after 3.5 years had passed, MSAA
\ndebtors had done little to repay their debts.<\/p>\n
\"I am not satisfied with this either. This is why we need a
\ncommercial solution in case they don't pay at all, because time
\nis running short,\" he said.<\/p>\n
Last week, the FSPC decided to lengthen the MSAA deal to
\n10 years and charge debtors lower interest rates.<\/p>\n
The FSPC is in charge of debt restructuring deals worth more
\nthan Rp 1 trillion, and sits together with senior economic
\nministers.<\/p>\n
Its decision drew criticism from analysts who questioned why
\nMSAA debtors had been given a break when they had not even begun
\nto repay their debts.<\/p>\n
Except for the Salim Group, the others have not begun their
\ndebt payments as their MSAAs are under revision. Ary Suta fell
\nshort of saying whether the MSAA extension incorporated final
\ndeals with the other MSAA debtors.<\/p>\n
Under the MSAA, the former bank owners can settle their debts
\nif they surrender assets of equal value to IBRA.<\/p>\n
However, if the value of these assets declines by the time
\nIBRA sells them, the agency has no authority to ask for more.<\/p>\n
Thus far, IBRA has been selling off Salim assets at values
\nmuch lower than they were at the time Salim surrendered them to
\nthe agency.<\/p>\n
Salim's assets are among the most precious under IBRA. The
\nsales of these have contributed much to the agency's meeting its
\nasset sales target of Rp 27 trillion this year.<\/p>\n
Now, with most of the Salim assets sold, IBRA must scramble
\nfor new ones to sell next year. The MSAA extension may pave the
\nway for IBRA to secure the assets of the other debtors.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ibra-defends-msaa-extension-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
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