City to sell Wisata Hotel in Bali

City to sell Wisata Hotel in Bali

JAKARTA (JP): The city administration said on Wednesday it
would sell a city-owned hotel in Kuta, Bali, which is reportedly
suffering debts of Rp 40 billion (US$4 million).

Governor Sutiyoso said the Wisata Hotel, which is held by
city-owned PT Wisata Niaga, would be sold as part of efforts to
cover the company's debts to city-owned Bank DKI.

"The tender for the hotel is continuing. We are still looking
for the highest offer from the tender participants," Sutiyoso
said at the City Hall.

He claimed selling the hotel was the only way to prevent the
company from suffering continued losses as a result of its debts.

Citing a similar reason, Sutiyoso also backed the plan to sell
10 hectares of land in Kemayoran, Central Jakarta, held by joint
venture firm PT Jakarta International Trade Fair (JITF), which
the city administration owns a stake in.

"If they have to sell their assets to cover their debt, why
not? It's better than suffering a continued debt which would just
grow larger because of the interest," the governor said.

He said the plan to sell the land was hit on as an alternative
to cover the company's debt to a Japanese consortium amounting to
Rp 1.5 trillion.

He said the company's revenue from exhibitions could not cover
its debt.

However, Sutiyoso said the sale of the land must be approved
by the City Council because the land belonged to the
administration.

"We will soon send a letter to the council informing them of
the plan to sell the land," he added.

Asked if the land would be sold to a company which also held
shares in JITF, Sutiyoso replied: "I still don't know the
mechanisms of the sale."

In a hearing with JITF's executives on Tuesday, some city
councillors opposed the plan to sell the land, saying it lacked
transparency.

"It's like insider trading. The land is the people's land,"
councillor Ugiek Sugihardjo of the Indonesian Democratic Party of
Struggle (PDI Perjuangan) said.

The councillors suggested that JITF be audited and the sale
postponed.

JITF president Edward Soerjadjaja denied the sale would
violate any regulations, saying the land belonged to the company.

Edward said the land would be sold for Rp 300 billion, or $300
per square meter.

JITF is 42.5 percent owned by a Japanese consortium, 52.5
percent owned by PT Jaya Nusa Pradana and 5 percent owned by
state-owned Kemayoran Management Body.

PT Jaya Nusa Pradana is 75 percent owned by Edward's firm PT
Griya Nusa Pratama and 25 percent owned by the city-owned Pekan
Raya Jakarta foundation.

The issue of insider trading emerged because it was reported
the land would be sold to PT Griya Nusa Pratama. (jun)