Govt to sell bankers' assets through IPO
Govt to sell bankers' assets through IPO
JAKARTA (JP): Some of the fixed assets in the form of
companies surrendered by owners of troubled banks to the
government to repay debts will be sold through initial public
offerings (IPOs) in the capital market, said chairman of the
Indonesian Bank Restructuring Agency (IBRA) Glenn S. Jusuf.
But, he added on Thursday, strategic investors would be sought
first before IPOs would be offered on the market.
"Because the current capital market condition is not ripe for
an IPO, the best solution is to invite strategic investors
first," he told reporters after speaking at the Indonesian Forum
conference.
He explained that strategic investors would not be discouraged
by the current economic crisis because they had a long-term
investment plans in the country.
He added that strategic investors had the capability to
maintain and increase the value of the companies before launching
them for an IPO.
Bank Indonesia has injected more than Rp 140 trillion in
emergency liquidity support since early this year to help out
during bank runs by panicked depositors in the wake of plunging
confidence in the industry.
The government on Nov.10 clinched a repayment deal with owners
of five troubled banks over some Rp 96.53 trillion in liquidity
support.
The bank owners will repay 27 percent of the loans in cash in
one year, and the balance in equal installments over the
following three years.
Glenn said the Salim Group, owner of the country's largest
private bank Bank BCA, had repaid 25 percent of its obligation.
The group has a total obligation of Rp 47.75 trillion,
including payments to reduce the bank's intra-group lendings to
the 20 percent legal limit.
Other businesspeople who have agreed on the repayment format
include Usman Admadjaja, owner of Bank Danamon; Sjamsul Nursalim,
owner of closed down Bank BDNI; Sudwikatmono, owner of closed
down Bank Surya and Bank Subentra; and Mohamad "Bob" Hasan, co-
owner of Bank Umum Nasional.
The tycoons have repaid their obligations partly in cash, but
mostly by ceding fixed assets including their share ownerships in
various listed companies.
The government has yet to reach a deal with owners of nine
other troubled banks.
The government has established a holding company to manage the
fixed assets.
Glenn said that selling the fixed assets through IPOs would
also provide an opportunity to the investing public in owning
part of the conglomerates' assets.
"This is also a means of wealth distribution," he added.
There have been rumors that certain parties in the government
have been pressing IBRA to redistribute the assets, which are
mostly controlled by Chinese-ethnic businessmen, to indigenous
people.
Glenn, however, denied any such pressure.
"The sales of assets will be transparent, so there can't be
any government interference," he pointed out.
IBRA was established early this year with a mission to recover
the liquidity support and help in restructuring the country's
ailing banking sector.
Under the government's bank recapitalization program, IBRA's
asset management unit will takeover the nonperforming loans of
banks joining the recapitalization program.
Glenn said the nonperforming loans would be restructured into
packages which then would be sold to investors.
"We'll start selling these loan packages in the first quarter
of next year," he said.
Glenn declined to mention the size of the loan package,
arguing that financial audits on the whole banking population had
yet to be completed. (rei)