Permata sale likely to take more than a month

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) admitted on Thursday that it might not be able to conclude the sale of a controlling stake in Bank Permata by the time its term expires next month.

If that is the case, the sale of Bank Permata would then be carried out by the succeeding institution, which is to be set up at a later date, IBRA deputy chairman I Nyoman Sender said.

"We (IBRA) will definitely run the divestment process. But, if the current one-month period proves to be insufficient, then the process will be continued by the new agency," said Sender, indicating the institution, as yet unestablished, which is to take over from IBRA and manage the unsold assets.

IBRA is scheduled to be closed down on Feb. 27. The new institution will be under the supervision of the office of the State Minister for State Enterprises.

IBRA planned to complete the sale of a 71 percent stake in Permata before Feb. 27, but as of now -- with less than a month left to its term -- the sale process has not begun, as the agency is yet to secure approval from the House of Representatives.

IBRA is also now finalizing the sale of a majority stake in Bank Lippo.

Over the past two years, it has already sold majority stakes in other banks under its supervision: Bank Central Asia (BCA), Bank Niaga, Bank Danamon and Bank Internasional Indonesia (BII).

Permata was formed two years ago from a merger of five ailing banks controlled by IBRA: Bank Bali, Bank Universal, Bank Arthamedia, Bank Prima Express and Bank Patriot. It is the 10th largest lender in the country and currently boasts assets of around Rp 30 trillion (US$3.5 billion).

Meanwhile, Sender detailed the agency's sale plan of selling a 51 percent stake in Bank Permata through a strategic sale, with the remaining 20 percent stake to be sold via block sale and drip sale.

IBRA holds a 91.3 percent stake in the bank.

Sender said the agency was hopeful that a hearing with the House could be held soon to help kick off the sale process.

IBRA was set up in 1998 to manage assets from indebted former bankers and to sell them to cover the budget deficit. For 2004, the government has targeted proceeds from the assets sales at Rp 5 trillion, which the agency must meet before its closure.