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)