IBRA asked to involve more local securities firms
IBRA asked to involve more local securities firms
JAKARTA (JP): Local securities firms demanded on Thursday the
Indonesian Bank Restructuring Agency (IBRA) to involve more local
securities firms in the sales of corporate assets under its
control.
Chairman of the Indonesian Securities Firms Association (APEI)
Jannes Naibaho said certain parts of corporate restructuring
including the sales of assets through the capital market could be
handled by local securities firms.
He criticized IBRA for giving most restructuring business to
foreign securities firms and investment banks.
"IBRA can always require the appointed foreign consultants to
pick local players to help them in the restructuring job," he
announced at a media conference.
Jannes claimed local securities firms had the necessary skills
to do corporate finance work.
"In fact, we understand more of the legal system here," he
added.
IBRA has a mission to restructure various assets under its
control worth more than Rp 600 trillion to help finance the
government bank restructuring and recapitalization program.
The government is expected to raise a total of Rp 550 trillion
worth of bonds to finance the bank restructuring and
recapitalization program.
IBRA is targeted to raise Rp 17 trillion this fiscal year to
help finance the interest cost of the bonds already issued by the
government.
The restructuring of IBRA's assets will involve selling some
assets on the stock market, processing mergers and acquisitions
and other corporate finance jobs.
IBRA has announced plans to merge seven or eight banks into
publicly listed Bank Danamon and list Bank Central Asia on the
stock market later this year or early next year.
The agency has hired foreign investment banks including JP
Morgan and Lehman Brothers to help the restructuring work. IBRA
has also appointed state-owned securities firms PT Bahana
Securities and PT Danareksa Securities.
Legislators earlier criticized the agency for massive spending
on foreign consultants.
IBRA chairman Glenn S. Yusuf said the state budget provided Rp
650 billion for consultancy costs, in which Rp 400 billion was
needed to pay the foreign consultants.
He added the World Bank pledged to provide US$10 billion in
loans to pay the consultancy fees.
Glenn reasoned the appointment of foreign consultants was a
must in order for the government bank restructuring program to
gain credibility.
But Jannes said the government must also help the local
securities industry to grow.
"I acknowledge the job of raising funds will be done best by
foreign consultants because they have the network to overseas
investors. But we can do the other restructuring advisory jobs,"
he said.(rei)