IBRA to sell Lippo, Permata in January

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) said on Tuesday it would divest its majority stakes in Bank Lippo and Bank Permata in January, only one month before its mandate expires.

"The process of selling the stakes in the two banks will start later this month," IBRA chairman Syafruddin Temenggung said.

The government, via IBRA, currently holds 54.9 percent and 91.3 percent stake in Lippo and Permata respectively.

Details of the sell-off were not available.

As confirmed during a Cabinet meeting on Monday, the life of the agency will not be extended. After serving its five-year mandate, IBRA will be wound up by Feb. 27 next year.

Consequently, the agency now has to press ahead with the sale of its remaining assets before it is shut down so as to avoid a possible backlash for failing to fulfill its mandated tasks.

The agency has so far this year collected Rp 17 trillion in proceeds, as compared to the Rp 26 trillion targeted for the full year. It has raked in a total of Rp 140 trillion from its assets sales since it was established in 1998.

IBRA was given the task of cleaning up the mess resulting from the financial crisis and nurture the troubled banks back to financial health.

Last month, IBRA had to postpone the sale of a 52 percent stake in the publicly listed Bank Lippo as the prices offered by the potential buyers were deemed too low.

It said that the postponement was unavoidable as the prices submitted by the three shortlisted consortia were below the re- bid price range of between Rp 384 and Rp 591 that had been determined earlier by the agency.

Given this price range, the proceeds from the sale of Lippo should have been more than Rp 1 trillion.

The re-bid price range has been set by IBRA upon learning that all consortia had submitted preliminary bids prices that were lower than the floor price of Rp 591 per share.

Other stakeholders in Lippo are the investing public (35.5 percent) and Lippo E-Net (9.6 percent), which represents Lippo's former controlling shareholder -- the Riyadi family.

Permata is a merger of five banks -- Bank Universal, Bank Bali, Bank Patriot, Bank Artamedia and Bank Prima Express. Boasting total assets of Rp 29 trillion, it is among the country's top ten banks.

Selling Lippo and Permata is the agency's next major task before its closure having already sold in the past two years majority stakes in Bank Central Asia (BCA), Bank Niaga, Bank Danamon and Bank Internasional Indonesia (BII).