Bapepam to issue rules to help firms restructure

Bapepam to issue rules to help firms restructure

YOGYAKARTA (JP): The capital market watchdog, Bapepam, is to
soon issue new rules on the revaluation of assets, mergers and
acquisitions, and income tax on debt write-offs.

Bapepam chairman Jusuf Anwar said here on Saturday that the
new rules were designed to help listed firms restructure
themselves to avoid being delisted from the local stock
exchanges.

"This is important because only healthy firms can give
shareholders great added value," Jusuf said at a seminar on how
to woo equity investors.

Jusuf, however, declined to mention when the agency would
unveil the new rules.

Finance minister Bambang Subianto issued a new decree last
month on asset revaluations, which allows companies to revalue
their fixed assets annually rather than quinquennially as
previously governed.

The ministerial decree is expected to enable troubled listed
companies to boost their capital bases from asset revaluations to
save them from being delisted from the local bourse.

According to the existing stock market regulations, listed
firms which suffered losses in the last three consecutive years
or which book financial losses on their balance sheets that
amount to half or more of their paid-up capital at the end of the
latest year will be delisted.

Jusuf said he would ask the JSX management and other
supporting professionals to review their delisting rules.

He said companies that were troubled but with good prospects
should be given a chance to restructure themselves so they could
improve their performance, which eventually would help their
stock prices recover.

Efforts to avoid delisting would benefit especially local
investors, which currently account for 70 percent of stock
trading on the JSX, compared to only 30 percent before the crisis
began in July 1997.

JSX president Cyrill D. Noerhadi said his exchange was
currently sounding out the possibility of merging with the
Surabaya Stock Exchange (SSX), the only Indonesian bourse outside
Jakarta.

"From informal meetings (between the management of the two
bourses) which I did not attend, there is an indication that
there will be a merger. But that is not yet formal, and it could
change," Cyrill said.

Former SSX director Isakayoga suggested that the management of
two exchanges ask expert opinion from a third party and learn
from the experience of Malaysia, which originally had one bourse
but now has three.

Jusuf promised that he would not intervene in the merger and
would approve any decision taken by the two exchanges. (44)