IBRA raises about Rp 2.8t as of mid-June

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)