IBRA to sell another Rp 8t worth of bank loans

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) said Wednesday that it would sell around Rp 8 trillion (US$900 million) in restructured loans to local and foreign investors via a limited auction.

IBRA said in a statement that the loans were owed by 29 individual companies and 20 business groups including the Astra Group, Mulia Group, Argo Pantes Group and the Bimantara Group.

The agency said that the loans had been restructured and were generally backed up with various forms of collateral.

It said that the debtors came from various industries including financial, housing, plantation, manufacturing, textile, steel, and oil and gas.

The agency said that qualified investor candidates would start the due diligence process at the end of this month and must surrender their bid at the latest by the end of next month.

IBRA added that the winning bidders would be announced early in December. IBRA has received around Rp 250 trillion or around $31 billion worth of non-performing loans (NPLs) from the country's troubled banks.

The agency is mandated to restructure the NPLs before selling them to investors to raise cash to help finance the state budget which is heavily burdened by the huge cost of the government bank restructuring and recapitalization program.

The agency has outsourced the restructuring process of the smaller NPLs.

IBRA is currently only focussing in the restructuring of around $26 billion worth of corporate loans owed by around two thousand debtors. Thesecorporate loans represent around 84 percent of the total IBRA loan portfolio but the number of corporate debtors only represent 1 percent of the more than 150 thousand debtors.

IBRA has so far managed to restructure around Rp 70 trillion worth of corporate loans.

The agency has raised around Rp 680 billion in cash from the recent sale of some corporate loans to Salomon Smith Barney/Citibank, Hammers and Rui Inc. of Japan, and the local Bank Central Asia (BCA).

It said that the proceeds represented around 71 percent recovery rate.

IBRA is targeted to raise Rp 18.9 trillion in cash this year to help finance the current state budget. So far the agency has raised around Rp 12trillion.

The agency has delayed the plans to sell its stakes in the publicly listed BCA and Bank Niaga into next year in a bid to obtain a better price.The proceeds from the sale of BCA and Bank Niaga was supposed to contributeto the Rp 18.9 trillion target.

It is not clear whether the proceeds from the sale of the Rp 8 trillion corporate loans would be contributed to this year's target or next year's target of Rp 27 trillion.

IBRA is also planning to sell its ownership of various companies to meet this year's target. (rei)