Fri, 23 Jun 2000

IBRA raises about Rp 2.8t as of mid-June

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) has raised about Rp 2.8 trillion (US$324.07 million) in cash as of June 16, less than 15 percent of the Rp 18.9 trillion target for the current fiscal year, according to agency deputy chairman Arwin Rasyid.

"We have to work extra hard in the next six months to meet the target," Arwin said on Thursday during a hearing with the House of Representatives Commission IX for the state budget and finance.

The meeting was also attended by Minister of Finance Bambang Sudibyo.

Arwin said that Rp 1.8 trillion was raised by the asset management credit (AMC) division, Rp 900 billion from the recent initial public offering of Bank Central Asia (BCA) and the remainder from "other income", mainly interest from time deposits.

He said the AMC division, which is responsible for restructuring the huge nonperforming loans (NPLs) transferred to the agency from domestic banks, was targeted to raise some Rp 10 trillion this year and that the main priority of the agency was to restructure the 21 largest obligors owing a combined Rp 84 trillion in NPLs.

The agency manages about Rp 220 trillion worth of NPLs.

An obligor is a debtor belonging or related to a single business group.

He said that the asset management investment, which is responsible for the various assets surrendered by former bank owners to repay debts owed to the government, was targeted to raise Rp 7.2 trillion.

He said that the agency was preparing to sell between 14 to 20 companies including through initial public offerings.

He also said that IBRA would immediately disclose to the public the list of the companies to be sold.

Arwin said that the remaining Rp 3 trillion would be raised from the divestment of the agency's investments in several banks and that IBRA planned to hold a second offering of BCA, and Bank Niaga.

IBRA took over several private banks, including BCA and Bank Niaga, following massive bank fund withdrawals in 1998.

IBRA was mandated to raise some Rp 17 trillion in cash last year, but the agency fell short of meeting the target.

Arwin said that he was optimistic that the Rp 18.9 trillion targeted for the April to December budget would be achieved.

He said that the actual target for this year was about Rp 20.6 trillion, but after deducting with the agency's expenses, the contribution to the state budget would be Rp 18.9 trillion.

Several legislators were surprised to learn that the agency's expenses were as high as Rp 1.7 trillion per year.

"This figure is too high compared to the target. How much are you paying yourself for this job?" asked one legislator emotionally.

Arwin claimed that he had no details of the expenses figures with him.

Arwin said that the agency currently controlled some Rp 7.8 trillion in cash mostly kept at bank time deposits, and the remainder in Bank Indonesia short-term promissory notes (SBIs).

The media lambasted IBRA recently because the agency had not transferred the money to the Ministry of Finance.

But Arwin said that the agency was allowed by a government ruling to temporarily use the money for the bank restructuring program. He didn't provide further details.

Arwin also said that the agency would immediately transfer some Rp 4 trillion to the Ministry of Finance, starting with Rp 1.5 trillion on Thursday. (rei)