IBRA to sell Bank Niaga, BCA in June: Edwin
IBRA to sell Bank Niaga, BCA in June: Edwin
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
plans to divest the government ownership in the publicly listed
Bank Central Asia (BCA) and Bank Niaga sometime in June,
according to agency Chairman Edwin Gerungan.
Edwin said on Wednesday that the sale of two banks would
contribute about Rp 6 trillion (US$6.38 billion) to IBRA's goal
to raise some Rp 27 trillion in cash this year.
"The two banks will be sold in June," he told reporters
following a meeting with President Abdurrahman Wahid at the State
Palace.
IBRA was supposed to fully divest the government's remaining
ownership in BCA and Bank Niaga in December last year, but the
plan was delayed due to poor market conditions at the time.
Coordinating Minister for the Economy Rizal Ramli said earlier
that the BCA and Bank Niaga sale would be completed sometime
between the first quarter and the second quarter of 2001.
Divestment of government ownership in the two banks is
expected to help revive investors confidence in the economy.
The International Monetary Fund (IMF) had expressed
disappointment over the delay in the key asset sale program.
The IMF, which is providing a multibillion dollar bailout fund
for the country, decided to cancel the disbursement of the next
US$400 million loan tranche for Indonesia into February or March.
The loan was supposed to be disbursed late last year.
The IMF did not clearly explain the reason for the delay, but
experts have said that the postponement was caused by the
government's failure to complete certain key economic programs
including the BCA sale by the agreed deadline.
One of IBRA's mandates is to raise cash by selling the various
banking assets under its management to help finance the state
budget deficit.
IBRA is targeted to raise Rp 27 trillion in the 2001 fiscal
year. The agency raised about Rp 20.7 trillion in the 2000 budget
year which consisted of only nine months.
Elsewhere, Edwin said that IBRA was planning to reduce the
size of its workforce this year.
But he said that it would not be a "huge layoff."
"It's just normal replacement," he said, pointing out that
some IBRA employees might feel that they would have a better
career if they returned to the private sector.
Separately, a senior government official said Wednesday that
the IMF deputy director for the Asia Pacific region Anoop Singh
was scheduled to visit Jakarta Friday to meet with key government
and central bank officials to discuss the country's economic
reform program.
Dipo Alam, assistant to the coordinating minister for the
economy, said that the discussion with Singh would include the
plans to sell BCA and Bank Niaga, the country's privatization
program and other key reform programs.
He said that the government expected to be able to complete a
new letter of intent (LoI) with the IMF sometime in February.
The LoI basically contains the various economic reform
programs to be completed by the government within a certain
period.
The IMF board of directors will review the LoI before it
disburses its next tranche to Indonesia.
The IMF promised in January last year to provide the current
administration some $5 billion in bailout funds to help finance
the country's three-year economic program. So far, the Fund has
disbursed about $1 billion. (rei)