IBRA opens bidding for nonperforming loans<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The Indonesian Bank Restructuring Agency (IBRA) opened on Tuesday
\nthe bidding for some Rp 35.5 trillion (US$4.33 billion) worth of
\nbad loans.<\/p>\n
The agency said the winning bidders would be announced on
\nSept. 5.<\/p>\n
IBRA took over about Rp 350 trillion worth of nonperforming
\nloans (NPLs) from the ailing banking sector in the wake of the
\nlate 1990s financial crisis.<\/p>\n
The agency is mandated to restructure and sell the loans to
\nraise cash and help finance the state budget deficit, and to
\nrestructure the banking industry. However, IBRA has been unable
\nto restructure all of the NPLs, and has been forced to unload
\nloans that have not been restructured.<\/p>\n
During the past year, the agency has sold NPLs with a total
\nface value of Rp 120.35 trillion, but the proceeds from the sales
\nonly amounted to about 30 percent of the face value. This was
\nbecause investors demanded deep discounts due to uncertainty in
\nthe country's legal system, making it difficult to force
\nrecalcitrant debtors to repay their debts.<\/p>\n
The government has ruled that the original debtors are not
\nallowed to buy back their loans. But there have been suspicions
\nthat some debtors have managed to repurchase their bad loans via
\nproxies at a large discounts.<\/p>\n
IBRA has been under pressure to unload various assets it took
\nover from the banking sector in the late 1990s, with the agency's
\nmandate scheduled to end early next year.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ibra-opens-bidding-for-nonperforming-loans-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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