Cooperatives' shares in firms managed by PT PNM

Cooperatives' shares in firms managed by PT PNM

JAKARTA (JP): PT PNM Asset Management, a subsidiary of the
newly established state financing company PT Permodalan Nasional
Madani (PNM), will manage cooperatives' stocks in publicly listed
companies.

The president of PNM, B.S Kusumuljono said here on Friday
that the company would, in the first stage, manage the shares
held by 10 cooperatives.

"We hope all cooperatives holding listed companies' stocks
will accept our offer," he told newsmen after the signing of the
agreement between the asset management company and the 10
cooperatives.

He said that the other eight cooperatives had agreed to join
the cooperation scheme and would soon sign a similar agreement.

The 18 cooperatives own shares in companies like PT Gudang
Garam, Bank Dagang Negara Indonesia (BDNI) and PT Barito Pasific
Timber, with a total market value of Rp 25.7 billion (US$3
million).

At least 3,400 cooperatives throughout the country own shares
in publicly listed companies, thanks to the government's campaign
launched in 1994 to narrow the gap between the weak and strong
companies. Their share ownership is worth Rp 186 billion.

Under the campaign sponsored by former president Soeharto, the
publicly listed companies are encouraged to sell up to one
percent of their shares to cooperatives at their nominal (face)
value, which is far lower than the market price.

The cooperatives pay for shares through dividend payments,
which they receive as stock owners.

Eddi Santoso, the corporate secretary of PNM, said that most
of the cooperatives could not benefit from their stocks since
installments for the shares had not been fully paid.

"The shares now remain idle, so what we do now is to borrow
the ownership of these shares and then turn them into productive
assets," he explained.

According to Eddi, the asset management company would use them
as collaterals to raise bank loans or as assets to back up bond
issuances.

The most feasible alternative would be to use the stocks as
collateral to issue bonds, he said, adding that the asset
management company had also secured a commitment from the
association of the Indonesian pension fund managers to help the
program.

He said funds to be raised from bond issuances would be pooled
and then channeled into cooperatives and small companies either
as cheap loans or as equity participation.

PNM was established in May 1999 to empower cooperatives and
small to midsize enterprises nationwide.

Though the company offers the pooling funds to cooperatives
throughout Indonesia, so far the eighteen joining the scheme all
come from Jakarta. (03)