Mon, 22 Dec 2003

IBRA to transfer all unsold assets to state-owned firms

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) said that it would transfer all remaining unsold assets to new companies operating under the Office of State Minister of State Enterprises.

Previously, it was planned that the assets would be taken over by a holding company under the Ministry of Finance, after IBRA's termination on Feb. 27, 2004.

"Those new institutions will become state-owned enterprises (SOEs), or subsidiaries of them, in the form of limited liability companies," IBRA chairman Syafruddin Temenggung said late on Friday.

He was speaking to reporters after attending a meeting on the issue with the Financial Sector Policy Committee -- an agency which oversees IBRA and consists of senior economic ministers in the Cabinet.

IBRA's mandate will expire after over five years of huge tasks restructuring and selling assets that it took over from the insolvent banking sector, which was the hardest hit by the devastating 1997-1998 financial crisis.

In total, the agency took over some US$60 billion worth of assets from ailing banks or their former owners. It was given a mandate to sell the assets to raise cash and thus help finance the state budget, which has continued to be heavily burdened by the huge cost of bailing out troubled banks.

While it has sold most of the assets -- namely non-performing loans, fixed-assets, and shares in banks -- there are also some assets that have yet to be sold so far.

Syafruddin said that the agency would inject capital into the planned companies (two or three) before eventually handing them over to the Office of the State Minister of State Enterprises in January next year.

"We will move fast. We expect the handing over process will be completed by mid January," he said, adding that the Ministry of Finance would filter out property assets that could be used for the government's purposes.

"The selection was to see whether there are assets, say office complexes, that the government could use," Syafruddin added.

Elsewhere, with IBRA's terms expired, the government has also planned to set up a special unit under the Ministry of Finance that will take over the role of IBRA in implementing the government's blanket guarantee program on bank deposits.

The unit, to be called the banking guarantee implementation unit (UP3), would operate on a temporary basis -- pending the planned establishment of a deposit guarantee agency (LPS), which needs more time to be set up as the government has yet to finish drafting the law as the legal basis for the agency.

The forming of the UP3 only requires a ministerial decree as its legal basis.


List of IBRA's unsold assets

1. Minority share ownerships in BCA, Bank Danamon, BII, Niaga and other banks. 2. About Rp 43 trillion worth of bad loan assets, the majority of which come from five companies -- textile giant Texmaco (Rp 27 trillion), aircraft maker Dirgantara Indonesia (Rp 2 trillion), Bali Nirwana Resort (Rp 2 trillion), Tirtamas Group (Rp 3 trillion), Dipasena (Rp 4 trillion) -- are still unsold. 3. Trillions of rupiah worth of smaller properties.