IBRA plans holding firms for equity and property assets
IBRA plans holding firms for equity and property assets
Berni K. Moestafa, The Jakarta Post, Jakarta
The Indonesian Bank Restructuring Agency (IBRA) said it
planned on creating two holding companies to accommodate the
properties and equity it took over from bank debtors, allowing
the agency to manage the assets beyond IBRA's term of operation
in 2004.
One holding company would manage IBRA's properties, while the
other would manage those firms in which it owns equity, IBRA
chairman I Putu Gede Ary Suta said on Thursday.
According to him, consolidating the assets will enable IBRA to
divest them faster and at a better price.
The plan has yet to receive the approval of the Fiscal Sector
Policy Committee, for which IBRA was working on a proposal, he
said.
He said the numerous properties that were piling up at IBRA
needed special attention lest their sales become ineffective.
"Otherwise, in the time limit we have we would not be able to
wrap up our work here," he explained.
But he also agreed to a delay in the sales of properties if
current market prices were deemed to low.
Ary Suta referred to a 16,000 hectare property owned by IBRA
in Pulau Bintan, which, if sold now, would generate very little
profit.
On equity, Ary Suta said the holding company would hold stakes
it acquired from debtors reaching a settlement through a debt to
equity swap scheme.
For instance, he said, IBRA owned a 10 percent stake in the
Bakrie Brothers Group after agreeing to convert the group's debt
of Rp 673.5 billion (about US$64 million) into equity.
"Now we have a 10 percent stake, but who's going to follow up
on this (debt restructuring), and who will attend the shareholder
meetings?" Ary Suta asked, after a press briefing on Bakrie's
debt restructuring.
Ary Suta refused to reveal how much IBRA owns in property or
equity.
The agency has amassed some Rp 600 trillion in assets taken
over from bank owners and their debtors. About one third of this
is in the form of bank loans.
IBRA is in charge of selling the assets to help recover public
funds used for bailing out the banking sector hit by the
financial crisis which began in 1997.
Founded in 1998, the agency is slated to finalize its work by
2004. But with a recovery rate of only eight percent as of Dec.
last year, there are worries it may not meet its targets on time.
At present, IBRA oversees several holding companies that
groups together assets or companies belonging to one debtor.
One is PT Holdiko Perkasa, to which were transferred from
companies formerly owned by the Salim Group.