IBRA fails to find buyers for huge loan assets
The Jakarta Post, Jakarta
The Indonesian Bank Restructuring Agency (IBRA) failed to secure buyers for loan and fixed assets worth around Rp 40 trillion (about US$4.87 billion) as bidders offered low prices at the conclusion of the sale process on Monday.
IBRA spokesman Raymond Van Beekum said that given that the prices offered by six investors for the assets were all below the agency's floor prices, IBRA decided not to name a winner and would now place the assets in the second sale program.
The six investors submitted final bids last week on three of the four strategic assets on offer, but a week's extension was provided to give them a chance to increase the value of their bids.
No revised bids were submitted until Monday.
IBRA launched the sale of the four assets in May as part of its program to raise proceeds, to be used later to help finance this year's state budget deficit, estimated at Rp 34.4 trillion.
IBRA has targeted taking in Rp 18 trillion in cash this year, along with Rp 8 trillion worth of bonds.
The assets on offer took the form of shares, bonds and non- performing loans belonging to four large IBRA debtors -- the Texmaco Group, petrochemical giant PT Chandra Asri, PT Bakrie Nirwana Resort and PT Rajawali III Sugar Factory.
Asian business giants including Malaysia's Utara Capital and China National Bluestar Corp were among the bidders. But the two, which initially expressed interest in buying Texmaco loans, did not submit final bids as the time provided to them to conduct due diligence was insufficient.
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 which produces, among other things, chemical and industrial cleaners.
As for the remaining assets, six bidders submitted final bids. They were Chinkara Capital, and Glazers & Putnam Investment ltd. (Chandra Asri), Goal Trading Assets Ltd., and PT Bahana Sarana (Bakrie Nirwana Resort), Mandari Consortium and Bapindo Consortium (Rajawali III Sugar Factory).
IBRA was established in early 1998 to restructure and sell more than Rp 400 trillion in bad loans it took over from local banks after the government bailed them out amid the 1997-1998 Asian financial crisis.
Elsewhere, Mohammad Syahrial, IBRA deputy chairman, said that IBRA would be happy to see the six investors rebid for the assets, although re-registration would be needed first.
He also said that the six investors were actually willing to increase their bids, but had asked for more time to conduct a more thorough due diligence.
To avoid similar problems in the future, he added, IBRA would assign a longer period for the due diligence process during the next sale program.