IBRA's new head says asset sales his top priority

JAKARTA (JP): New chief of the Indonesian Bank Restructuring Agency (IBRA) Cacuk Sudarijanto set his top priority on Thursday as the sale of government stakes in PT Astra International, Bank Central Asia and Bank Bali.

"My primary task is to achieve the agency's revenue target of Rp 17 trillion (US$2.36 billion) for the state budget by the end of March," Cacuk said after he was installed by finance minister Bambang Sudibyo to replace Glenn Yusuf.

The agency has raised some Rp 10 trillion from asset sales and expects to secure the remaining Rp 7 trillion from the sale of stakes in the country's largest automaker and the two banks.

Cacuk said IBRA would push ahead with its plan to sell its 40 percent stake in Astra.

"The process is on track and according to schedule. The management of Astra has been fully cooperative with us," Cacuk said.

He said that if matters continued to proceed smoothly, Astra would convene an extraordinary shareholders meeting on Feb. 8.

He said IBRA was engaged in negotiations with the preferred bidder, an American investor group led by Newbridge Capital and Gilbert Global Equity Partners.

"We are negotiating on how much the investor group will have to pay up-front as a commitment fee to show its seriousness in purchasing a stake in Astra," he said.

Cacuk said the investor group agreed in principal with the up- front fee requirement, with only the amount remaining to be decided.

Earlier media reports said the investor group agreed to an up- front payment of about 10 percent of the transaction value.

But Cacuk said the reported amount was inaccurate and stressed that negotiations were still under way.

"No, it's not 10 percent. We are still negotiating. It could be higher than that."

He added that Bank Central Asia, in which IBRA is the majority shareholder, would make an initial public offering later in March.

"We badly need additional cash from the sale of our stake in Bank Central Asia to meet our Rp 17 trillion revenue target."

Cacuk described IBRA as a good organization with a large pool of professionals.

"I will not make any serious changes in the agency as it already has a good organizational structure and capable human resources."

He said he was impressed by the financial expertise shown by IBRA personnel during the past two months when he was vice chairman of the agency.

Although he has been linked to the "axis force" of Muslim- oriented political parties, Cacuk sought to assure the public of his independence and professional integrity in leading IBRA.

"I'm not representing the interest of any political party. My task is to make the best out of IBRA for the sake of this country's economic well-being."

Separately, President Abdurrahman Wahid said on Thursday that there were no political motives behind his decision to replace Glenn with Cacuk.

"I replaced Glenn simply because he had been very slow and sometimes even indecisive in dealing with the thousands of corporate debtors now under IBRA."

He said Glenn appeared to be afraid of potential litigation from companies which came under IBRA's control.

He added that Glenn's deputy Faried Haryanto did not perform to expectations, indicating that the finance minister was now preparing Haryanto's replacement.

The President said he was concerned that delays in the handling of corporate debtors would erode the value of the businesses and consequently undermine the country's economic recovery.

"Therefore, I decided to replace the IBRA chief at the recommendation of Emil Salim, chief of the National Economic Council."

In an apparent expression of approval for Cacuk's appointment, the International Monetary Fund (IMF) said on Thursday that strong leadership of the agency was crucial to the success of the fund's programs in Indonesia.

IMF director for external relations Thomas Dawson said in Singapore: "A strong IBRA and an independent IBRA is absolutely essential for the central bank restructuring program to go forward."

Also installed together with Cacuk on Thursday were seven key officials of the finance ministry.

A. Anshari Ritonga, formerly the tax director general, was appointed director general for budget, Mahfudh Sidik the tax director general, Herwidayatmo the chairman of the Capital Market Supervisory Agency (Bapepam) to replace Jusuf Anwar, Noor Fuad the secretary-general to replace Agus Haryanto, who was appointed inspector general, Darmin Nasution the director general for financial institutions and Achmad Rochjadi the chief of the Agency for Financial and Monetary Analysis. (udi/prb)