Tue, 15 Jul 2003

IBRA fails to draw investors for Texmaco assets

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) said on Monday it had failed to lure investors for the sale of Rp 28 trillion (some US$3.1 billion) worth of Texmaco Group debts.

The agency completed the sale process of four types of assets during the weekend.

IBRA announced that six investors had met the July 11 deadline and submitted their final bids, but none of them had bid for the Texmaco debts. Texmaco is a textile and engineering conglomerate.

The agency has been trying to sell the four asset types, which are a combination of debts and shares with a face value of around Rp 40 trillion. The proceeds will help finance the 2003 state budget deficit.

IBRA said that six investors made offers on the debts of petrochemical giant PT Chandra Asri, PT Bakrie Nirwana Resort and PT Rajawali III Sugar Factory.

It remains unclear why potential investors had withdrawn their bids on the Texmaco assets.

Previously, Asian business heavyweights, including Malaysia's Utara Capital and China National Bluestar Corp., were among potential investors expressing an interest in IBRA's largest remaining debtors, but failed to submit their final bids on time.

Utara is co-owned by Mukhriz Mahathir, the youngest son of Malaysian Prime Minister Mahathir Mohammad, while China National Bluestar is a state-owned company that produces, among other things, chemical and industrial cleaners.

The failure to sell the assets of Texmaco, founded by tycoon Marimutu Sinivasan, may lead the agency to relaunch them in the next sale program, expected to start in the third quarter of the year, although pressure to raise funds will increase as IBRA is scheduled to be dissolved in February next year.

IBRA has repeatedly said it would strive to have its tasks completed by the end of this year, meaning that it has to be aggressive in its asset sales program.

IBRA was established in early 1998 to restructure and sell more than Rp 400 trillion in bad loans that it took over from local banks after the government bailed them out amid the 1997- 1998 Asian financial crisis.

So far it has only contributed some Rp 7 trillion to state coffers.

The Texmaco Group has two main divisions, namely textiles and engineering. Of the Rp 28 trillion worth of assets on offer, Rp 8 trillion came from its textiles division.

Investors submitting final bids

1. Chinkara Capital and Glazers & Putnam Investment Ltd. bid for Chandra Asri's and Barito Group's assets. 2. Goal Tarding Assets Ltd. and PT Bahana Sarana bid for Bakrie Nirwana Resort. 3. Mandari Consortium and Bapindo Consortium bid for Rajawali III Sugar Factory.