Govt may delay divestment programs after bomb blast

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.