Mon, 06 Mar 2000

IBRA to sell nine firms in 2000 to raise $2.5b

ANYER, West Java (JP): The Indonesian Bank Restructuring Agency (IBRA) is planning to sell its stakes in some nine additional companies this year in a bid to help raise Rp 18.9 trillion (US$2.5 billion) for the next state budget, according to a senior official at the agency.

A group head at the agency's asset management investment unit, Dasa Sutanto, said at the weekend the asset disposal would be mostly conducted through initial public offerings (IPOs).

"I think the total will be about nine companies," he told reporters at a media gathering.

He declined to name the companies.

He said the companies were assets pledged by former bank owners in 1998 to repay debts to the government.

He said among the assets to be sold included companies from the Salim Group and the Gadjah Tunggal Group.

But he added that the region's largest integrated shrimp firm, PT Dipasena Citra Darmaja, would not be included in the agency's IPO list.

"Dipasena is still facing serious social problems," Dasa said, pointing to the ongoing clashes between the company and local shrimp farmers.

IBRA initially planned to launch an IPO for Dipasena early this year to help raise some Rp 17 trillion in cash for the current 1999/2000 state budget ending this month.

But the company has been being embroiled in a conflict with its local shrimp farmers since last year.

Dasa was optimistic that IBRA could meet the Rp 18.9 trillion target of the 2000 state budget, particularly if the imminent sale of its 45 percent stake in publicly listed auto giant PT Astra International went successfully.

He said that about half of the proceeds would come from the agency's asset management investment unit, with the other half coming from the asset management credit division which manages bad bank loans transferred to the agency.

IBRA has appointed a consortium of three firms to bid for the Astra stake. The three are currently conducting a due diligence process on Astra. The agency expects the three investors to submit their final bids on March 23.

Astra is one of IBRA's prime assets.

Dasa said the success of the Astra sale process would provide a positive impact for the planned IPO of Bank Central Asia (BCA), another of IBRA's prime assets.

The BCA IPO was initially scheduled for this month but was delayed due to various reasons.

IBRA's public relations officer, Franklin Richard, said part of the reason was due to BCA's fourth quarter financial performance which was much better than its third quarter.

He pointed out that the bank's September report showed less than Rp 50 billion in net profit, while its December report showed more than Rp 100 billion.

"This will make BCA more attractive," he said.

Franklin said the agency expected to complete the BCA IPO in May.

The proceeds from the BCA IPO will go to the April-December 2000 state budget.

The government initially targeted IBRA to raise only Rp 16.25 trillion for the 2000 state budget, but it later increased the target to Rp 18.9 trillion.

Some economists fear that the agency might not be able to meet the target, particularly as it would also be competing with the government's privatization program.

The government plans to sell some eight companies to raise some Rp 6.5 trillion in privatization proceeds this year. The companies are PT Aneka Tambang, PT Angkasa Pura II, PT Bukit Asam, PT Perkebunan Nusantara III and IV, PT Pupuk Kaltim, PT Indo Farma and PT Kimia Farma.

State Minister of Investment and State Enterprises Development Laksamana Sukardi has called on the agency to coordinate its assets program with the ministry's privatization program to gain optimum results.

Laksamana said the lack of coordination between the ministry and IBRA could crowd out the market and both agencies may be unable to achieve maximum earnings.

Dasa agreed with Laksamana.

"I think what we must do is coordinate with the State Ministry of Investment and State Enterprises Development to avoid "competition" which could force the two sides to take a fire sale approach," Dasa said.

He, however, admitted that raising the target of IBRA's asset sale by more than Rp 2 trillion would put pressure on the value of the assets to be disposed.

Asked whether the agency could meet the Rp 17 trillion target, particularly after the BCA IPO, which was supposed to raise around Rp 3 trillion, had been delayed, Dasa said: "I'm optimistic. We have other sources."

IBRA has so far raised Rp 10.5 trillion. It expected to be able to raise some Rp 3 trillion from the Astra divestment plan. (rei)