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The
Jakarta Post, Jakarta
The
Indonesian Bank Restructuring Agency (IBRA)
said it planned on creating two holding companies
to accommodate the properties and equity it
took over from bank debtors, allowing the agency
to manage the assets beyond IBRA's term of operation
in 2004. One holding company would manage IBRA's
properties, while the other would manage those
firms in which it owns equity, IBRA chairman
I Putu Gede Ary Suta said on Thursday. According
to him, consolidating the assets will enable
IBRA to divest them faster and at a better price.
The plan has yet to receive the approval of
the Fiscal Sector Policy Committee, for which
IBRA was working on a proposal, he said. He
said the numerous properties that were piling
up at IBRA needed special attention lest their
sales become ineffective.
"Otherwise, in the time limit we have we would
not be able to wrap up our work here," he explained.
But he also agreed to a delay in the sales of
properties if current market prices were deemed
to low. Ary Suta referred to a 16,000 hectare
property owned by IBRA in Pulau Bintan, which,
if sold now, would generate very little profit.
On equity, Ary Suta said the holding company
would hold stakes it acquired from debtors reaching
a settlement through a debt to equity swap scheme.
For instance, he said, IBRA owned a 10 percent
stake in the Bakrie Brothers Group after agreeing
to convert the group's debt of Rp 673.5 billion
(about US$64 million) into equity. "Now we have
a 10 percent stake, but who's going to follow
up on this (debt restructuring), and who will
attend the shareholder meetings?" Ary Suta asked,
after a press briefing on Bakrie's debt restructuring.
Ary Suta refused to reveal how much IBRA owns
in property or equity. The agency has amassed
some Rp 600 trillion in assets taken over from
bank owners and their debtors. About one third
of this is in the form of bank loans. IBRA is
in charge of selling the assets to help recover
public funds used for bailing out the banking
sector hit by the financial crisis which began
in 1997. Founded in 1998, the agency is slated
to finalize its work by 2004. But with a recovery
rate of only eight percent as of Dec. last year,
there are worries it may not meet its targets
on time. At present, IBRA oversees several holding
companies that groups together assets or companies
belonging to one debtor. One is PT Holdiko Perkasa,
to which were transferred from companies formerly
owned by the Salim Group.
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The
Jakarta Post, Jakarta
The
Italian government has agreed to provide a US$10
million soft loan to the Indonesian Footwear
Association (Aprisindo) for the development
of a training center to improve the skills of
Indonesian shoemakers and the quality of their
export products. Italian Ambassador to Indonesia
Alessandro Merola said on Thursday that the
training center was expected to start operating
at the beginning of 2003. He said that the center
would be located in the East Java town of Sidoardjo
and would be named the Indonesian Footwear Service
Center (IFSC). "We hope that the local administration
in Sidoardjo will start building the center
in September or October next year so that, if
we're lucky, the center will commence operations
in early 2003," Merola said on the sidelines
of a one-day conference for the Indonesian footwear
industry.
The center will provide training to Indonesian
shoemakers with some of the trainers coming
from Italy, which has long been regarded as
one of the world's best shoe manufacturers.
It is expected that the IFSC will be actively
used by the Italian footwear industry to promote
technology and design capabilities, as well
as promoting any form of cooperation sought
with Indonesian counterparts. Merola said that
Aprisindo would permanently take charge of the
center in its fourth year of operation. "We
will operate the center for the first three
years under Italian assistance, where we will
undertake training of the trainers," the ambassador
said.
Aprisindo praised the agreement as a positive
step toward a better future for the industry,
saying the world-class training programs would
provide the country's shoemakers with the skills
required to play a bigger role in the international
market. "I'm glad that the deal has finally
been made," Antonius Tardia, an Aprisindo official
said, adding that the association had been negotiating
the deal with the Italians since 1996. The deal
comes at a time when the country's footwear
sector has been severely hit by the global economic
downturn, with many analysts predicting that
the global economy is on the brink of a full-blown
recession. The association earlier warned of
a 10 percent drop in exports for this year.
In 2000, Indonesia's total shoe exports worldwide
were 217 million pairs, valued at $1.7 million.
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