Kwik demands IBRA provide government with cash

JAKARTA (JP): Coordinating Minister for the Economy, Finance and Industry Kwik Kian Gie insisted on Friday that the Indonesian Bank Restructuring Agency (IBRA) surrender Rp 17 trillion (US$2.28 billion) in cash, not a combination of cash and bonds, in the current fiscal year ending on March 31.

Kwik said that the cash was needed to help finance the 1999/2000 state budget.

"It must be in cash (in full) to support the state budget," he told reporters on the sidelines of a seminar.

Kwik said that IBRA could surrender bonds as long as they could be sold immediately.

"What the government needs is cash to finance the budget. We can't pay salaries with bonds," he added.

Kwik was responding to a question relating to a recent statement made by IBRA chairman Cacuk Sudarijanto that the agency was considering providing the government with a combination of cash and bonds.

"One of our aims is to meet the Rp 17 trillion target, but all of this doesn't have to be in cash, some can also be in government bonds," Cacuk said.

The government has injected bonds to recapitalize several banks. But it turned out that the banks -- the publicly listed ones -- needed less bonds than estimated as they raised more cash when they launched rights issues to facilitate the recapitalization program.

IBRA plans to surrender the excess bonds to the government as a payment toward its revenue target.

Cacuk said the agency expected it could raise Rp 1.89 trillion from the bonds.

IBRA is targeted to raise Rp 17 trillion in the current budget year ending this month to finance half of the budgetary cost of the government's bank recapitalization program and another Rp 19 trillion in the next budget between April and December.

But there is increasing doubt whether the agency can meet the target as the planned sale of Bank Central Asia (BCA) has been delayed until May.

IBRA plans to launch an initial public offering for BCA in a bid to raise about Rp 3 trillion.

BCA is one of IBRA's prime assets.

The agency is currently in the process of selling its 45 percent stake in the publicly listed auto giant PT Astra International.

A consortium of three companies is now conducting a due diligence process and are expected to submit their final bids on March 23. The winner will be announced on March 25.

IBRA controls various form of assets, including bank nonperforming loans transferred to the agency from closed down, nationalized and recapitalized banks.

The agency also expects to raise cash from the recovery of the bank loans. (rei)