IBRA to float BCA in bid to regain funds<\/p>\n
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
\nplans to float Bank Central Asia (BCA) on the stock market in
\nDecember or early next year in a bid to recover part of the huge
\nsum the government has spent on the national bank restructuring
\nprogram.<\/p>\n
IBRA Chairman Glenn S. Yusuf said on Thursday the public
\noffering of the country's largest private bank would help IBRA
\nraise a Rp 18.2 trillion (US$2.71 billion) target of revenue for
\nthe state budget in the current fiscal year ending March 2000.<\/p>\n
"BCA will go public either in December or January," he said at
\na regular media briefing.<\/p>\n
Glenn said, however, the realization of the plan would depend
\non the market's condition.<\/p>\n
"Timing here is very important because we want to maximize the
\n(proceeds) result," he said.<\/p>\n
He added the size of the public offering would depend on the
\nmarket demand.<\/p>\n
"But normally it is about 30 percent," he said.<\/p>\n
Glenn also said BCA's capital adequacy ratio would be doubled
\nto 8 percent at an estimated cost of Rp 28.48 trillion before the
\nbank was floated.<\/p>\n
IBRA took over 99 percent ownership in BCA last August after
\nthe bank breached the legal lending limit and its owners, the
\nSalim Group and former president Soeharto's children, failed to
\nrepay Rp 48 trillion in emergency liquidity support from the
\ncentral bank.<\/p>\n
Glenn said BCA would acquire smaller Bank Risjad Salim
\nInternasional, which was also previously owned by the Salim Group
\nand now in the hands of the agency, prior to the public offering.<\/p>\n
The Salim Group has pledged its stakes in some 78 companies to
\nrepay its debt to the government. This includes a 2.5 percent
\nstake in the world's largest instant noodlemaker, PT Indofood
\nSukses Makmur, and a 8 percent stake in Hong Kong listed First
\nPacific Co.<\/p>\n
Glenn said the Salim Group was currently arranging a road show
\nto sell 12.5 percent of its shares in Indofood in a bid to repay
\npart of its debts to IBRA and other creditors.<\/p>\n
Glenn said the agency was also planning to sell its 8 percent
\nstake in First Pacific in the current fiscal year.<\/p>\n
He added IBRA would also divest its 44 percent ownership in
\nthe publicly listed giant automaker, PT Astra International,
\nduring the same period.<\/p>\n
IBRA received the Astra stake from several owners of closed
\nbanks who had debts to the government.<\/p>\n
IBRA was asked by the government to raise Rp 17 trillion this
\nfiscal year to help finance the interest cost of treasury bonds
\nissued to fund the bank restructuring and recapitalization
\nprogram.<\/p>\n
But IBRA set its internal revenue target at Rp 18.2 trillion.<\/p>\n
Finance minister Bambang Subianto said on Wednesday the total
\nbank restructuring and recapitalization cost was estimated at Rp
\n550 trillion, or as large as half of the country's 1998 gross
\ndomestic product at current prices.<\/p>\n
The government plans to issue bonds worth over Rp 351 trillion
\nthis year, out of which Rp 157 trillion were floated recently.<\/p>\n
The interest cost of the Rp 351 trillion bond issue for the
\ncurrent fiscal year was estimated at Rp 34 trillion. Half of the
\ncost would be provided by IBRA and the other half by the state
\nbudget.<\/p>\n
Bambang said the interest cost of the bond issue next fiscal
\nyear would be even higher, particularly if the country's monetary
\nauthority failed to further lower domestic interest rates or IBRA
\nfaced difficulties in recovering the various assets now in its
\nhands.<\/p>\n
IBRA currently controls over Rp 600 trillion worth of assets
\nincluding some Rp 200 trillion in debts owed by former bank
\nowners to the government, Rp 230 trillion in non-performing loans
\n(NPLs) owed by over 1,600 debtors and Rp 103 trillion in
\nrecapitalization investments in several major private banks.<\/p>\n
IBRA's Glenn was optimistic the agency could raise the
\ntargeted Rp 17 trillion this fiscal year.<\/p>\n
He said some Rp 13 trillion was expected from the sales of its
\nstakes in 200 companies surrendered by indebted bank owners.
\nThis includes stakes in BCA, Indofood, First Pacific and Astra.<\/p>\n
He added the remaining 5.2 trillion would be derived from the
\nrestructuring of NPLs assets or asset liquidation.<\/p>\n
Glenn had earlier said the major source of revenue from its
\nvarious assets was expected to come from its investment in
\nrecapitalized banks.<\/p>\n
He pointed out the current market value of several publicly
\nlisted banks already recapitalized by the government had
\nsurpassed the government investment in the banks.<\/p>\n
The government has recapitalized Bank Lippo, Bank
\nInternasional Indonesia and Bank Universal.<\/p>\n
He also said the interest of investors participating in the
\nrecapitalization program was huge as reflected in the
\nhigher-than-expected rights issues bought by independent
\ninvestors of the banks.(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ibra-to-float-bca-in-bid-to-regain-funds-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}