BI to transfer Texmaco loans to IBRA

JAKARTA (JP): Bank Indonesia Governor Sjahril Sabirin said on Friday that Texmaco Group's bad loans owed to the state-owned Bank Negara Indonesia (BNI) would be "immediately" transferred to the Indonesian Bank Restructuring Agency (IBRA).

Sjahril said that the transfer of the category five bad loans was part of the requirements of the government bank recapitalization program.

"They will be transferred immediately," he told reporters following Friday prayers.

The newly independent central bank is supervising the country's banks until the government forms a special supervisory body for financial institutions within the next year.

Sjahril declined to mention the exact date of the transfer and the size of Texmaco's loans.

"You can come again to me next week to check," he said.

The transfer of the Texmaco loans from BNI to IBRA became a controversy last year not only because the group was accused of using its connections with former president Soeharto to get a huge Rp 9.6 trillion (US$1.29 billion) loan from BNI, but also because there was speculation that the group was trying to prevent the loan transfer.

Bad loans transferred to IBRA would have to be either restructured under the agency's tough terms or risk litigation measures.

Texmaco is the country's largest integrated textile group. It also owns large stakes in the truck, tractor and engineering goods industries.

Then BNI president Widigdo Sukarman said in November 1999 that the Texmaco loans were category four or substandard loans. It is not clear how many of the loans have since been classified as category five bad loans.

Banks joining the government recapitalization program must transfer all of their category five loans as well as loans with provisions of more than 50 percent to IBRA.

BNI is one of the state banks to be recapitalized this year that has boosted its capital adequacy ratio (CAR) to beyond the 4 percent minimum level.

The bank needs around Rp 52.8 trillion in recapitalization funds. It launched a rights issue last year to facilitate the recapitalization program, but it only managed to raise around Rp 238 billion from public shareholders, leaving the government to purchase the remainder.

In a January letter of intent to the International Monetary Fund, the government said it planned to recapitalize BNI by Feb. 29.

Asked about the delay, Sjahril said, "It's only because of a technical problem." He declined to elaborate.

Meanwhile, Sjahril also said that Bank Indonesia would continue its efforts to divest its 100 percent ownership of the Amsterdam-based Indover Bank.

Bank Indonesia has to divest its ownership in the bank because it has become an independent central bank focusing on monetary policy.

"We expect the divestment program to be completed this year," he said.

Sjahril said that Bank Indonesia had nearly completed a deal with a buyer in 1998, but it was dropped following the financial crisis in the region.

Indover has also operations in Hongkong.(rei)