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.