IBRA lambasted for low recovery in asset sale
IBRA lambasted for low recovery in asset sale
The Jakarta Post, Jakarta
Instead of bragging about its target-achieving feats, the
Indonesian Bank Restructuring Agency (IBRA) should focus more on
efforts to boost the recovery rate of its assets sales to
minimize the burden of the state, experts said over the weekend.
"The agency seems to concentrate on efforts to generate the
proceeds from assets sales only to meet the target. But they care
less about its recovery rate," banking analyst Ryan Kiryanto,
said.
"Some assets that could have brought in lots of money to the
government and become engines for the economy, have been sold at
cheap prices," he added
IBRA claimed on Thursday it had raised Rp 27.98 trillion
(US$2.7 billion) in cash and Rp 10.6 trillion in recapitalization
bonds, exceeding this year's target.
So far, IBRA has been selling off assets at a value much lower
than they were at the time the agency took them over in 1998 from
indebted former bank owners.
The recovery rate of the asset sales formerly belonging to the
Salim Group, for instance, which is widely regarded as the most
prestigious set of assets under the agency, has just managed to
reach 48.6 percent by the end of 2001.
PT Holdiko Perkasa, a holding company charged with overseeing
the disposal of former Salim assets, said it had collected more
than Rp 11 trillion of gross earnings this year, or some 40
percent of IBRA's proceeds.
To date, IBRA has been enduring hard times in selling assets
other than the high-profile Salim Group's.
IBRA took over assets from most of the country's conglomerates
three years ago after they failed to repay their huge debts to
the government.
The ex-bank owners who are also business tycoons signed an
agreement with IBRA called the Master of Settlement and
Acquisition Agreement (MSAA).
Under the agreement, former bank owners have to hand over
their fixed assets, including company ownership, to the agency.
The Salim Group, for example, surrendered its ownership of 109
companies to repay a total debt of Rp 52 trillion to the
government. The group previously had owned Bank Central Asia
(BCA).
Aside from the Salim Group, Bob Hasan, (co-owner of the Bank
Umum Nasional), Sjamsul Nursalim (owner of Bank Dagang Nasional
Indonesia), Ibrahim Risyad and Sudwikatmono (owners of two
smaller nationalized banks) have also signed the agreement.
However, the agreement also stipulated that the former bank
owners would not have to provide additional assets if it turned
out that the assets, when sold, were not sufficient to cover the
debts.
The slow progress of selling assets aside from Salim's has
just made the situation worse.
This could spell trouble as most -if not all- of the sold
assets were purchased at values that were far less than when they
were taken over by the government.
The latest example would be the recent disposal of the
publicly listed PT Indomobil Sukses International to the
Trimegah-led consortium.
IBRA sold its 72 percent stake in the country's second largest
car maker to the consortium on Dec. 10 for some Rp 625 billion,
or a mere one third of the company's value when IBRA took control
of the company in 1998.
"This (Indomobil sale) is only one case. IBRA should have
taken this into consideration to monitor its performance. Not
just focusing on generating proceeds to meet the target," Ryan
added.
Should IBRA keep selling assets at low prices, the loss that
the state might incur, at the expense of public funds, would be
enormous.
The government has issued around Rp 600 trillion worth of
bonds to bailout ailing banks.
Meanwhile, IBRA asset disposal head, Dasa Sutantio said asset
values declined because of weaker sentiment in the stock market.
As some assets are valued in accordance with their stock value
in the market, their recovery rates depend on the market index
movements.
"Nobody can determine the market's movement, neither the
debtor nor the creditor," Dasa said.
He said an improved macro economic condition would help
bolster market sentiment.