Govt may delay divestment programs after bomb blast

Rendi A. Witular and Tony Hotland Jakarta

The government may have to delay the divestment of state-owned enterprises (SOEs) in the remaining period of this year, after a bomb exploded in front of the Australian Embassy on Thursday.

State Minister of State Enterprises Laksamana Sukardi said the government would not force the sale of stakes in the SOEs unless domestic security conditions returned to normal and the market had regained its confidence.

"We will not force proceedings with the divestment programs if the market remains in an unfavorable condition following the blast," said Laksamana after a hearing with the House of Representatives' Commission IX on financial affairs.

"The privatization process will still continue. We are not canceling it, we're just delaying it," Laksamana said.

Some SOEs likely to be affected by the delay include Bank Negara Indonesia (BNI), the country's third largest bank in terms of assets, and airliner PT Merpati Nusantara. The government plans to sell state assets to help finance the state budget deficit, estimated at around Rp 26.3 trillion this year.

The government plans to sell 30 percent of its stake in the publicly listed BNI to investors on the stock market in October, and as much as 51 percent of Merpati to strategic investors in November.

BNI shares are currently traded at 1.45 times their book value of Rp 839.7 based on June's figures. The government has appointed JPMorgan Chase & Co. and state brokerage firm Bahana Securities to arrange the sale.

The commission decided on Thursday to wait until next week on whether to approve the proposed divestment of BNI and Merpati.

"There are still different perceptions among the commission members over the divestment of BNI and Merpati. We still need some time to seek clarification from the government over several issues," commission chairman Emir Moeis said.

Emir explained the commission would still need government clarification regarding the settlement of BNI's Rp 1.7 trillion (US$188 million) loan scandal, and on Merpati's latest debt restructuring program.

The government has targeted to raise Rp 5 trillion from the sale of shares in SOEs this year. So far, the government has raised about Rp 3.6 trillion.

The government, through asset-management firm PT Perusahaan Pengelola Asset (PPA) is currently in the process of selling a 51 percent stake in Bank Permata, the country's seventh-largest bank by assets.

"We will not delay the tender process due to the blast. We are going to seek confirmation from the participants (bidders) to see whether they are still committed to join the tender," said Syahrial.

Five business groupings -- the Standard Chartered and PT Astra International; United Overseas Bank; Malayan Banking Bhd and PT Jamsostek; Commerce Asset-Holding; and Bank Panin and Australia & New Zealand Banking Group consortia -- are competing for the Permata stake.