IBRA chief wants improved bids for Lippo

IBRA chief wants improved bids for Lippo

Agence France-Presse, Singapore

The Indonesian Bank Restructuring Agency (IBRA), tasked with reforming the country's banking sector, said here on Monday it could halt the planned divestment of Bank Lippo unless interested parties improved their bids.

"If they can't strengthen their consortium, I think I could stop the divestment this year," IBRA chairman Syafruddin Temenggun told reporters on the second day of the World Economic Forum's East Asia forum.

"I met them last week the three investors and they promise me to strengthen the bids."

Temenggun declined to say the price tag he was looking for from the bidders but said his comments to investors "is to do due diligence because there's potential upside."

Citing previous sales of major banks as a guide, Temenggun said Bank Danamon was sold to a consortium co-led by Singapore's Temasek Holdings, a state investment arm, at almost 1.3 times the book value of the bank.

IBRA is selling 52 percent of Bank Lippo through a strategic sale and three consortium, representing investors from Hong Kong, Indonesia and Singapore, have shown interests.

IBRA was set up in early 1998 to restructure the foundering local banking system after the 1997-1998 regional financial crisis sent the sector into a tailspin.

It is disposing of assets that were pledged to settle debts owed to the government following a massive bank bailout.