IBRA to initiate Bank Lippo sale during June

IBRA to initiate Bank Lippo sale during June

Dadan Wijaksana, The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) expects to start
the sale of a majority stake in Bank Lippo next month, provided
it gains the backing of the House of Representatives later this
month.

"We hope to start the Bank Lippo sale in June should
everything run in order. Once the House gives its approval, we'll
launch it," IBRA Chairman Syafruddin Temmenggung said on
Thursday, adding the agency would meet with the House Commission
IX on financial affairs to seek its approval.

He did not say how much of the stake would be sold and what
mechanism would be used to sell it. IBRA has said, however, that
it preferred to sell the majority, as investors would find it
more attractive to have a controlling stake and would pay more
for it.

Syafruddin's statements reiterated IBRA's commitment to the
Bank Lippo divestment program.

Many have raised doubts over the continuation of the program,
mainly due to the fact that IBRA has been slated to be closed by
the end of the year.

Syafruddin played down such concerns, saying: "For the
divestment program, we'll proceed with the initial schedule."

Once Lippo's auction begins, he added, IBRA would immediately
put its stake in Bank Internasional Indonesia (BII) up for sale.

He said IBRA expected to complete both sales this year.

The government, through IBRA, holds a 59.3 percent stake in
Lippo and a 59.3 percent stake in BII in return for trillions of
rupiah worth of recapitalization bonds injected into local banks
in the aftermath of the 1997 financial crisis.

IBRA is in charge of nurturing banks under its supervision
back to financial health and selling them to private investors.

Since its establishment five years ago, IBRA has sold Bank
Central Asia (BCA), Bank Niaga and Bank Danamon, all of which are
included in the country's top-ten rated banks.

Asides from Lippo and BII, IBRA has also Bank Permata on its
sale list, although Syafruddin admitted it would not be conducted
this year.

Permata emerged as a new bank in September last year from the
merger of five small banks: Bank Bali, Bank Universal, Bank
Patriot, Bank Arthamedia and Bank Prima Express.

Meanwhile, Syafruddin disclosed that the agency had
distributed a total of Rp 140.75 trillion in cash to the
government as of the first quarter of the year.

The amount was obtained from asset sales during the past five
years.

IBRA took over about Rp 660 trillion worth of assets, mostly
in the form of non-performing loans, from the country's troubled
banking sector following the crisis, and is tasked with
restructuring and selling them, with the proceeds to be used in
part to help finance the annual state budget.

This year, IBRA has been targeted to collect Rp 18 trillion
from its sale program.