Sat, 23 Aug 2003

IBRA completes sale of 2,647 property assets

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) has raked in some Rp 751 billion (US$89.5 million) in proceeds from its latest property assets sale program.

The proceeds come from 894 winning bidders in the "individual assets" category and 15 winners for assets "offered under packages", or in the "bulk assets" category, IBRA said in a statement late on Thursday.

"A total of 4,771 bidders were interested in individual assets and 65 bidders in bulk assets," the statement added.

IBRA offered a total of 2,647 assets in the third property assets sale program, which was launched in July.

The winners have to make payments from Sept. 1 to Sept. 15, while the agency will start refunding security deposits, transferred by non-winners, on Sept. 1.

The assets were part of the collateral from bad loans, transferred by local banks to the agency, after the banking crisis in the late 1990s.

IBRA said, proceeds from the third property assets sale program exceeded those from the second property assets sale program, which amounted to Rp 650 billion.

According to the statement, the most popular assets in the bulk assets category consisted of 13 units in a villa in Mambruk, West Java and 17 units of Hayam Wuruk Apartment, Jakarta. The packages attracted 6 and 4 bidders, respectively.

IBRA took over the bad loans and their collateral from local banks in 1999 and is tasked to restructure and sell them back to the private sector.

Now that IBRA is nearing the end of its mandate, slated for February next year, it is in a hurry to sell the remaining assets.

Critics have blamed IBRA for failing to gain maximum recovery rates from its assets sales, saying the agency is only interested in meeting the target set by the government for its contribution to the state budget.

This year, the agency has been tasked to contribute to the state's coffers Rp 18 trillion in cash and another Rp 8 trillion worth of bonds.

IBRA frequently claims that the recovery rate of its property assets sale programs reaches up to 60 percent, much better than rates of other sale programs, especially non-performing loans or credit sale programs.

But, earlier this year, for example, IBRA launched the third sale of credit assets, with a face value of Rp 27 trillion, yet, only raked in Rp 3.4 trillion. This means that the recovery rate was less than 13 percent.

It recently launched the fourth credit assets sale but analysts are already doubtful that the program will be a success story.

In defense, IBRA blames the low quality of the credits it took over from the banking sector, saying that most of the assets were in such poor condition that restructuring attempts were doomed to be fruitless.