Lehman Brothers and JP Morgan named IBRA's financial advisors
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) has named Lehman Brothers and JP Morgan as its international financial advisors to help rehabilitate the country's beleaguered banking sector.
IBRA has also selected Deutsche Bank AG as financial adviser for six unlisted state banks -- Bank Rakyat Indonesia, Bank Dagang Negara, Bank Tabungan Negara, Bank Bumi Daya, Bank Ekspor Impor Indonesia and Bank Pembangunan Indonesia.
The agency said in a statement late Thursday that the investment banks were selected from seven leading banks which submitted detailed proposals on a thorough review of the key issues facing the Indonesian banking sector, specific analysis and recommendations for restructuring the sector.
It said it had invited 10 leading investment banks but only seven of them showed interest and presented their proposals.
The seven banks gave presentations about their proposals before representatives from IBRA, Bank Indonesia, the Ministry of Finance, the World Bank and the International Monetary Fund.
IBRA's vice chairman Farid Harianto said the selected banks had presented "qualified and comprehensive proposals which contain the best qualifications in assets restructuring and sales".
"Besides, they also show their consistent commitment to Indonesia and our economic development."
IBRA's chairman said after the selection of financial advisors that his agency would expedite the restructuring process of banks under its supervision so that it would give certainty and fairness to depositors, creditors and shareholders alike.
"After consulting with our advisors, IBRA's next important moves would include the restructuring and selling of six banks which have been taken over, detailed plans on assets sales and the securitization of seven suspended banks and overall strategy of banking restructuring and funding," Glenn said.
The six banks are Bank Danamon, Bank Dagang Nasional Indonesia, Bank Umum Nasional, Bank Modern, Bank Tiara Asia and Bank PDFCI.
Under the most recent agreement with the IMF, the government has agreed to either "freeze, merge, recapitalize, or liquidate" the six banks, starting mid-July.
The seven suspended banks are Bank Kredit Asia, Bank Pelita, Bank Subentra, Bank Surya, Centris International Bank, Deka Bank and Hokindo Bank.
IBRA was established in January to supervise the restructuring of the country's troubled banks ridden with hefty bad loans and to manage the deposit guarantee plan.
The cleanup of the sector is to involve potential domestic mergers, acquisitions by strategic foreign partners, disposal of nonperforming assets and a recapitalization program.
"IBRA has received proposals from strategic foreign partners with international reputation and domestic banks which are interested in recapitalization, acquisition and mergers with banks under IBRA," the agency said.
The agency said Minister of Finance Bambang Subianto supported all of its efforts to revamp the ailing banking sector.
"The rehabilitation of the financial sector is an important component of the government's efforts to restructure and rehabilitate the economy and IBRA's existence contributes greatly to the process," Bambang said.
"That's why the government supports IBRA's moves to ensure that the process proceeds in the most effective and efficient way for the sake of the restoration of confidence which is very important to our economy." (rid)