The Indonesian Bank Restructuring Agency (Ibra) has begun one of its more significant asset sale programmes to date, the first of the two “Strategic Assets Sale Program” or “Program Penjualan Aset Strategis” (PPAS). This programme is targeted to divest the debts and related assets of four of Ibra’s strategic obligors.
The four strategic assets being offered for sale are the Texmaco Group, Chandra Asri Group, the Nirwana Bali Resort, and Pabrik Gula Rajawali III. Each of the above companies/assets is considered strategic since it occupies a leading presence in its industry, has the potential to generate significant foreign exchange benefits, has significant obligations owing to Ibra (more than Rp500bn), and employs a large number of workers. This programme is unique compared to other Ibra loan sale programmes, since Ibra plans to optimise the sale proceeds by also selling its significant equity stakes in each of these companies together with their outstanding debts. Ibra’s total portfolio of these strategic assets is in the order of about US$2.5bn and Rp18.6tn.
Ibra’s chairman, Syafruddin Temenggung says that the agency will target potential investors that can fulfill the objectives of optimising sale proceeds while enhancing the value of the underlying enterprises. “We will strive to attract potential investors that possess the relevant industry and investment experiences together with the financial capability to not only acquire the strategic assets but also to support the underlying companies so that they can continue to provide employment opportunities to their work force. This sale process has been tailored to target these results whilst ensuring a fair and transparent process,” he says.
“We will allow special purpose companies to bid for these assets. However, they have to be controlled by principal investors who can meet the above criteria,” he elaborates in response to the issue of whether Ibra would permit such special purpose vehicles.
Ibra claims that it has structured the sale process to ensure a level playing field to prospective bidders. The sale involves a two-stage process will be ensure transparent results. The first stage would require the submission of technical bids, which would include bidders” qualifications and future plans to add value to the business. In the final stage, qualified bidders would submit their price bids. In addition, all prospective bidders will be allowed more than a month during which to conduct their own due diligence investigations.
To ensure optimum provision of information to potential investors, Ibra plans to conduct investor meetings and site visits possibly within the month of May.