Tue, 10 Oct 2000

IBRA seeking more shares in Indofood, Indocement: Official

SINGAPORE (JP): The Indonesian Bank Restructuring Agency (IBRA) is seeking to get more of the Salim Group's quality assets, including the publicly listed instant noodle giant PT Indofood Sukses Makmur and cement maker PT Indocement Tunggal Prakarsa, a senior official of the agency said here on Monday.

Director for IBRA's asset management investment (AMI) division Dasa Sutantio told businesspeople that the agency was identifying which of the remaining Salim group assets IBRA could take over to cover the shortfall in the group's debt repayment to the government.

"But we first want to ascertain that the quality assets, notably Salim's remaining shares in Indofood and Indocement, have not been pledged to other creditors," Dasa added.

The agency had previously acquired around 8 percent of Indofood from the Salim Group but it has already sold the stake to raise cash for the state budget.

The Salim Group, according to the latest government estimate, has to cede an additional Rp 30.3 trillion worth of assets because the value of the shares in more than 100 firms that it had earlier ceded to IBRA to repay around Rp 53 trillion (US$6.23 billion) in debt had deteriorated to only Rp 20 trillion.

Coordinating Minister for Economic Affairs Rizal Ramli demanded last week that Salim as well as other indebted conglomerates cede their "cash-cow" assets within one month in order to fully repay their debts.

The conglomerates must surrender assets to repay the massive liquidity support injected by the government between 1998 and 1999 to save their banks during the peak of the country's financial crisis.

Besides the Salim Group, other former bank owners such as Bob Hasan, Sjamsul Nursalim, Sudwikatmono, and Ibrahim Risyad have been ordered to put up additional assets to settle their debts.

"IBRA's asset forensic unit will be responsible for identifying and tracing the assets of the conglomerates," Dasa said.

But he added that before the conglomerates ceded more assets, the government via the office of the coordinating minister for economic affairs should first reach agreements with the former bank owners.

The government has been under strong pressure from the House of Representatives and the International Monetary Fund to ensure that the former bank owners repay their debt.

IBRA vice chairman Arwin Rasyid added that the agency was on track to meet its Rp 18.9 trillion ($2.2 billion) revenue target this year despite the recent delay in the sale of the publicly listed Bank Central Asia (BCA) and Bank Niaga.

"We are optimistic that the target will be achieved. There's no excuse," he told investors attending the roadshow which will also cover Hong Kong and Tokyo.

Arwin said that the agency had prepared around 16 companies for sale in the fourth quarter to raise between Rp 6 and 7 trillion.

The companies for sale include mini market chain PT Indomaret, milk processing firm PT Indomilk, food seasoning maker PT Indomiwon, TV broadcasting firm PT Indosiar, galvanized iron/steel manufacturer PT Kerismas, anti mosquito coils maker PT Mosquito Coil Group, chemicals firms PT Salim Oleochemicals, mining firms PT Salim Coal and PT Sulfindo, catering firm PT Pangansari Utama, property firm PT Puri Imperium Apartment, credit card company PT Diner Jaya Indonesia, securities firm PT Ficor Securities, Bank Hanvit Indonesia, and several properties belonging to the Bentala group and the Modern group.

The agency must raise at least Rp 18.9 trillion to partly plug the Rp 44 trillion budget deficit in the current fiscal year ending in December.

IBRA has so far raised around 12 trillion in cash. In addition to the asset sale, the agency also expects to raise cash from the restructuring and recovery of non-performing loans it took over from closed and nationalized banks.

The agency initially planned to sell BCA in the fourth quarter to raise around Rp 1.92 trillion. This program, including the sale of Bank Niaga, was stipulated in the reform program with the IMF that has to be implemented before the end of the year.

But the House decided last week to delay the BCA and Bank Niaga sales in order to get a better price. Legislators said that selling the two banks right now given the current political and macro economic conditions would result in very low prices.

BCA is the country's largest private bank. IBRA nationalized BCA and Bank Niaga in a bid to save the banks during the worst of the financial crisis.

The government has said that BCA and Bank Niaga would be sold in the first or second quarter of next year. The agency is targeted to raise around Rp 27 trillion in cash in 2001. (rei)