IBRA meets 2000 cash target of US$ 2 billion

IBRA meets 2000 cash target of US$ 2 billion

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
has met the government's target to raise some Rp 18.9 trillion
(US$2 billion) in cash to help finance the 2000 budget.

IBRA said in a press statement that it had raised about Rp
20.71 trillion during the fiscal year.

"In the fiscal year 2000, IBRA has provided some Rp 20.71
trillion in cash to the finance ministry. Some Rp 18.9 trillion
is to be contributed (to the state budget), while the remainder
is to repay (the government) guarantee fund," the agency said.

One of IBRA's mandates is to raise cash to help finance the
state budget which has been heavily burdened by the huge cost of
the government bank restructuring and recapitalization program.

In the current 2001 fiscal year, IBRA must raise Rp 27
trillion in cash to help finance the state budget deficit
estimated at 3.7 percent of gross domestic product.

The huge deficit arises primarily from the interest costs of
the government bank restructuring and recapitalization bonds
worth more than Rp 600 trillion. The interest costs this year
are estimated at Rp 55 trillion.

The agency must sell various banking assets under its
management to meet the target. IBRA must also recover the huge
amount of bad loans transferred by closed down and recapitalized
banks including via restructuring measures.

IBRA, a unit under the finance ministry, controls more than Rp
600 trillion worth of various fixed banking assets and some Rp
260 trillion worth of bank bad loans. Former bank owners
surrendered various assets to help repay their debts to the
government.

One of IBRA's key deals in 2000, was the sale of its stake in
the publicly-listed auto giant PT Astra International in March to
a consortium led by Singapore's Cycle & Carriage. The proceeds
went to help meet the agency's 1998/1999 cash target.

The IBRA 2000 target was fulfilled after the agency managed to
sell plantation firms previously owned by the Salim Group in
December to Malaysia's Guthrie for some Rp $350 million.

Salim is the former owner of the giant Bank Central Asia
(BCA).

IBRA was strongly criticized last year after the government
decided to postpone the sale of the agency's remaining ownership
in BCA. The agency was supposed to complete the sale late in
2000, but the government and the House of Representatives decided
to postpone it to the first quarter of 2001 due to unfavorable
market conditions.

The delay irked the International Monetary Fund, which some
say is one of the reasons prompting the Fund to delay the latest
disbursement of $400 million loan tranche. The loan is now
expected to be disbursed sometime in February or March.

The IMF promised in January last year some $5 billion to help
finance a three-year economic reform program. The IMF has
disbursed about $1 billion so far.

The recovery of bad loans contributed to meeting the 2000
target when IBRA was able to sell some restructured loans.

The IBRA statement said that the agency managed to sell around
Rp 1.63 billion in bank corporate loans last year.

IBRA managed to resolve around 89.41 percent of the Rp 88.5
trillion in non-performing loans owed by 21 of its largest
debtors, according to the statement.

The agency said that 86.56 percent or equal to Rp 76.60
trillion of the debt had been resolved via restructuring (MoUs of
the debt restructuring agreement have been signed), 9.88 percent
had been resolved via litigation, and the remaining 2.85 percent
was still in process.

The agency said that it could not reach 100 percent resolution
of the debt owed by the 21 largest debtors last year because in
some cases IBRA was a minority creditor and needed time to
negotiate with the bigger creditors. (rei)