IBRA loan asset sale program falls short of target
Dadan Wijaksana, The Jakarta Post, Jakarta
The Indonesian Bank Restructuring Agency (IBRA) said on Wednesday it had secured at least Rp 17.75 trillion (US$2.4 billion) in proceeds from a sale of loan assets with a face value of Rp 145 trillion.
IBRA deputy chairman Sumantri Slamet said only Rp 52.2 trillion in assets had attracted bidding prices above floor prices set by the agency.
"We will at least receive some Rp 17.75 trillion from this sale," he told a media conference.
The agency had earlier expected a recovery rate of 20 percent to 30 percent, or at least to raise about Rp 29 trillion from the largest ever loan asset sale in Asia.
Sumantri said that the agency would still allow certain bidders, which had bid slightly below the floor prices, to make new bids.
He said that IBRA was hoping to raise another Rp 4 trillion from the rebids.
Nevertheless, this would still leave IBRA well short of its recovery target.
IBRA took over more than Rp 250 trillion-worth of nonperforming loans from ailing banks and closed down banks in the late 1990s. The agency is mandated to restructure the loans and resell them to the banking sector. But after four years, the restructuring process has been moving very slowly.
Under pressure to raise cash to help finance the state budget deficit, IBRA then moved to sell the loan assets even though they had not yet been restructured.
Around 60 percent of the loan assets sold to investors were categorized as unrestructured loans.
IBRA is targeted to raise some Rp 42 trillion in funds this year.
The sale program started last month. Some 231 bidders, of which 111 were foreigners, expressed interest in the loan assets.
Analysts have long warned the agency not to include the unrestructured loans in the program, for fear of low recovery rates.
The winning bidders whose offers were already above the floor prices would be given 48 hours to make the first payment, while investors whose offers were too low would be allowed to make rebids, also within 48 hours.
IBRA has stipulated that all winning bidders must make the first payment, amounting to 20 percent of the bidding value, within two working days, the next 20 percent within seven days and the remaining 60 percent within 21 days.
Analysts have also said that the proceeds would contribute to help strengthen the rupiah as foreign investors would have to exchange their cash dollars into rupiah.
As for the loans that failed to attract investor interest, Sumantri said the agency had three actions in mind: to sell them in packages, through joint ventures or via a holding company.
20 largest winning bidders
1. Bank Mandiri-Anugra Cipta Investama consortium, 2. PT Danatama Makmur, 3. PT Bank Artha Graha, 4. Bank Mandiri-Jasa Banda Garta consortium, 5. Japan Asia Investment Co.-Indonesia, 6. Multi Sarana Investama Securitas, 7. PT Agung Securitas Indonesia, 8. Bank Mandiri-Mahanusa Securities consortium, 9. Verandah International Ltd., 10. Asia Kapitalindo Securities, 11. Neoasia Holding Ltd., 12. Harita Kencana Securities, 13. Indo Kapital Securities, 14. Bank Mandiri-Prosperindo Sekuritas consortium, 15. PT Catur Menaraputra, 16. Maxima Perdana Finance Inc., 17. Victoria Securities Int'l Ltd., 18. PT GMT Aset Manajemen, 19. PT Mandarin Securities, 20. Asia Strategic Fund