IBRA won't cut prices of loan assets
IBRA won't cut prices of loan assets
The Jakarta Post, Jakarta
The Indonesian Bank Restructuring Agency (IBRA) said on Tuesday
it would not lower the floor prices of its Rp 40 trillion
(US$4.87 billion) worth of assets which failed to interest buyers
during an earlier sale.
IBRA deputy chairman Mohammad Syahrial said that the agency
wanted to ensure a respectable recovery rate from the assets.
"There will be no cuts in the floor prices. It's okay if there
are no buyers for the assets, we will not lower the prices,
because they are already low," he was quoted by detik.com as
saying.
He said that the particular assets would be included in the
sale of another group of assets, scheduled to start next week.
He added that investors would be given a longer due diligence
period of up to 45 days.
He said that one reason for the low bids submitted by
investors during the earlier asset sale program was because of
the relatively shorter due diligence period.
IBRA launched the sale of the Rp 40 trillion worth of assets
in May. When six bidders submitted their final bids on Monday, it
turned out that all were below the floor prices set by the
agency.
The assets are in the form of non-performing loans and fixed
assets including shares of four of IBRA's large debtors namely
Texmaco Group, Petrochemical giant PT Chandra Asri, PT Bakrie
Nirwana Resort and PT Rajawali III Sugar Factory.
Six investors which managed to submit final bids in the first
program were Chinkara Capital and Glazers & Putnam Investment
ltd. (Chandra Asri), Goal Tarding Assets Ltd. and PT Bahana
Sarana (Bakrie Nirwana Resort), Mandari Consortium and Bapindo
Consortium (Rajawali III Sugar Factory).
IBRA has said that it would welcome investors involved in the
first program to rebid for the assets, although re-registration
would be required.
IBRA was established in 1998 to restructure and sell more than
Rp 400 trillion in bad loans it took over from local banks after
the government bailed them out amid the 1997-1998 Asian financial
crisis.
The proceeds from the asset sale were to be used to help
finance the state budget deficit, which this year is estimated to
reach Rp 34.4 trillion. The agency is hoping to raise around Rp
18 trillion in cash this year.