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)