IBRA debtors told to pay 30% in cash by October
The Jakarta Post, Jakarta
Debtors under the state's Deed of Indebtedness Agreement (APU) have until the end of next month to repay 30 percent of their debts in cash if they want to avoid lawsuits by the Indonesian Bank Restructuring Agency (IBRA).
IBRA chairman Syafruddin Temenggung said debtors could repay the remainder through asset settlements and assets which they had already pledged as collateral to IBRA.
The agency has signed 24 APU schemes with former shareholders of banks, nine of whom with total debts worth Rp 1.32 trillion (about US$146 million)
"We want 30 percent to be paid by October, the other installment by January and the rest by March," Syafruddin told reporters after a hearing on Thursday with the House of Representatives' Commission V, which oversees state enterprises.
He added that the January installment was set at 40 percent and the March installment at 30 percent.
The APU debt settlement scheme is one of three schemes under the 1998 umbrella agreement known as the shareholders' settlement program. The program applies to former bank owners whose banks IBRA took over after injecting them with state bonds that kept them afloat during the 1997 economic crisis.
Aside from APU, the former bankers have signed Master of Settlement and Acquisition Agreements (MSAA) and Master of Refinancing and Notes Issuance Agreements (MRNIA).
Combined they cover debt settlements worth over $10 billion.
But as the program expires this year, repayment has been minimal, forcing IBRA to threaten legal action.
Under the guidelines of the Financial Sector Policy Committee (FSPC), IBRA has also revised the APU scheme to entice debtors to pay.
The original APU scheme requires the former bankers to repay the debts at annual interest rates set at 3 percentage points above Bank Indonesia's benchmark rates.
"We ask for everything to be repaid except for the interest," said Syafruddin, adding he was waiting the FSPC's guidelines to act on MSAA and MRNIA debtors.
The FSPC groups senior economic ministers and supervises IBRA's high profile debt settlement deals worth over Rp 1 trillion.
IBRA was founded to restructure ailing banks and to sell off their nationalized assets. Proceeds from IBRA's sales should help cover the state budget deficit which is estimated to come in at Rp 42 trillion this year.
With the conclusion of several key asset sales such as that involving the country's largest private bank, Bank Central Asia (BCA), IBRA is resorting to group sales of smaller assets.
On Thursday, the agency announced plans to sell off 1,700 property assets with a total value of Rp 600 billion.
IBRA spokesman Raymond Van Beekum said the agency would list the names of the properties next Monday. Prospective buyers will have until Oct 24th to place their bids, with the winners being announced soon afterwards, he added.