IBRA to divest ownership in BCA and Bank Niaga

IBRA to divest ownership in BCA and Bank Niaga

JAKARTA (JP): The government plans to further divest part of
its ownership in publicly listed Bank Central Asia (BCA) and Bank
Niaga this year in a bid to raise cash to help finance the state
budget, deputy chairman of the Indonesian Bank Restructuring
Agency (IBRA) Arwin Rasyid said on Monday.

Arwin said that the plan was made last week by the Financial
Sector Policy Committee (FSPC), but was yet to be approved by the
House of Representatives.

The FSPC is led by Coordinating Minister for Economy, Finance
and Industry Kwik Kian Gie. Its members include senior economic
ministers.

Arwin declined to disclose the size of the divestment and the
targeted proceeds, saying that it was "still being calculated".

He said that details about the divestment plans would be
announced together with the agency asset disposal plans for this
year.

The agency has said it plans to sell between 14 and 20
companies this year, some through an initial public offering
(IPO).

BCA and Bank Niaga are among several banks to have been
nationalized by IBRA, a unit of the finance ministry.

IBRA now owns 97.87 percent of Bank Niaga. It owns 70 percent
of BCA after it offered 22.5 percent to the market through an IPO
earlier this year.

The agency initially planned to divest four banks this year,
including publicly listed Bank International Indonesia and Bank
Universal.

IBRA is mandated to raise around Rp 18.9 trillion (US$2.07
billion) in cash to help finance the current state budget.

So far it has raised only around Rp 4 trillion, Rp 3 trillion
of which came from the agency's debt restructuring unit. The
remainder came from asset disposal and other income.

The bank divestment program was expected to contribute around
Rp 3.07 trillion to the Rp 18.9 trillion target.

IBRA controls assets worth more than Rp 600 trillion including
non-performing loans (NPLs) transferred from the country's
banking sector.

The agency is mandated to dispose of the assets and
restructure and recover the NPLs to raise cash as well as to help
restructure the country's banking and corporate sectors.

IBRA has been criticized for the slowness of its asset
disposal and debt restructuring.

The International Monetary Fund has called on the agency to
speed up the asset sale.

IBRA deputy chairman Slamet Sumantri said at last week's
gathering with local journalists that the agency's chairman Cacuk
Sudarijanto was now speeding up the debt restructuring and asset
disposal program.

"He wants things to get moving. Cacuk is stepping on the
gas ... We now feel that things are moving extremely fast," he
said, adding that sometimes the fast decision making process had
been misunderstood by the media as a one-man show by Cacuk.

"The Rp 18.9 trillion target to be raised in nine months means
that we must raise Rp 100 billion everyday. It's a tough job," he
said.

The current state budget only runs from April to December.

Slamet said that the current weak market conditions was one of
the factors inhibiting the agency's asset disposal program.(rei)