IBRA debtors told to pay 30% in cash by October

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.