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The Indonesian Bank Restructuring Agency (Ibra) and PT Holdiko Perkasa (Holdiko) has announced that Holdiko has signed a sales and purchase agreement with PT Karuna Paramita Propertindo (KPP), a company affiliated to PT Berca

  • Indonesia (Berca). The agreement is to sell Holdiko’s entire 47.5% shareholding and loans to Holdiko in PT Metropolitan Kentjana Tbk (MK Tbk) for Rp605bn and US$6.2mn respectively, grossing a total proceed of about Rp661bn.

    Holdiko is a holding company established in 1998 to be the holding company for expropriated Salim Group assets under Ibra (see GTR, Nov/Dec, p68).

    “We are very pleased to have finally completed the sale of Metropolitan Kentjana to Berca. The sale of this asset has been very competitive throughout its process and is our largest sale for 2002. The funds from the sale of MK Tbk will be received and transferred to BPPN before year-end for this year’s budget,” states Scott Coffey, president director of Holdiko.

    The finalisation of this sale process was initially delayed due to a lawsuit filed by PT Grandwood Buana against the Salim Group in October 2002, claiming 10% ownership of Holdiko’s entire 47.5% shareholding in MK Tbk that were formerly transferred by the Salim Group to Ibra through the Master Settlement Acquisition Agreement (MSAA). However, on November 25, 2002, Lontoh & Kailimang acting as legal counselor of PT Grandwood Buana submitted a request to the district court to withdraw their lawsuit, and Holdiko was able to conclude the sale transaction of MK Tbk with KKP.

    Ibra/Holdiko commenced to sell Holdiko’s 47.5% ownership in MK Tbk, an integrated real estate developer whose portfolio of prime property assets in Jakarta include the Pondok Indah Mall, Pondok Indah Estate, Wisma Metropolitan I & II, and World Trade Center building, in mid April this year. PT PricewaterhouseCoopers FAS acted as financial adviser to Ibra/Holdiko for this transaction.

    As publicly announced on May 29, 2002, Holdiko received 11 preliminary bids from local and international investors coming from both the property and financial sectors. As a result of the very competitive prices received, all 11 investors were invited to participate in the due diligence phase, and a third stage of the bidding process was accordingly incorporated to increase the competitiveness of the sale process. Five investors submitted their binding bids, and on September 26, 2002 Ibra/Holdiko announced the names of three investors who submitted the highest bids, namely (i) PT Berca Indonesia, (ii) PT Puspita Nirmala, and (iii) PT Sarana Inti Transindo Perkasa. Ibra/Holdiko provided them the opportunity to resubmit a final bid using the highest binding bid as the minimum price, and Berca finally submitted the highest bid of gross Rp661bn, on September 27, 2002, or equivalent to a P/E multiple of 20 based on historical earnings. This compares favourably to a P/E multiple of 15 (weighted-average) for all of Holdiko’s asset sales since 1999.

    The recent agreement sees Berca, through its affiliated company, PT Karuna Paramita Propertindo (KPP), sign the sale and purchase agreement. KPP is a subsidiary of PT Central Cipta Murdaya (CCM), a holding company that also owns PT Berca Indonesia. Established in 1994, KPP was established to develop CCM’s property business aspect in addition to their existing businesses in trading, contracting, technology and electronics.

    “We believe that with its prime asset location, good company performance and proven track record of sound management, Metropolitan Kentjana will continue to become a major property player,” says Siti Hartati Murdaya, president director of PT Karuna Paramita Propertindo, who also holds the position of president director of PT Central Cipta Murdaya and chairman of PT Berca Indonesia. “We trust that by working together with the other existing shareholders we will be able to contribute to the future development of the company.”

    MK Tbk was established in 1972 as an integrated real estate developer. In the same year, MK Tbk commenced development of the exclusive Pondok Indah residential estate located in south Jakarta. Currently, the Pondok Indah portfolio has expanded to include Pondok Indah Mall, Golf Pondok Indah Apartment, and Pondok Indah Office Tower. MK Tbk’s future development plans include an additional shopping mall as well as apartment and office towers. Aside from its direct ownership of the Pondok Indah Group, MK Tbk also holds shares in other additional companies, ie, 50% in Antilope Madju Puri Indah (of which Holdiko owns a 23.75% indirect shareholding); 50.5% in Jakarta Land (of which Holdiko owns a 23.99% indirect shareholding); and 99.6% in Bumi Shangri-La Jaya (of which Holdiko owns 47.31%).

    “Holdiko was able to sell Metropolitan Kentjana Tbk at a P/E ratio of 20 (based on historical earnings), a significant premium to other listed real estate companies on the Jakarta Stock Exchange, reflecting the strength of Metropolitan Kentjana’s business,” says Coffey. “The P/E multiple of 20 for the MK Tbk asset sale also compares favorably with the P/E multiple of 19.5 (weighted-average) for all of Holdiko’s asset sales since 1999.”

    To date Holdiko has succeeded in raising Rp3.8tn for Ibra’s budget this year.

    PT Holdiko Perkasa was established in relation to the settlement between the Salim Group and Ibra with regard to loans extended by PT Bank Central Asia (BCA) to companies affiliated to the Salim Group. As part of the settlement agreement with Ibra, the Salim Group transferred shares and assets in more than 100 operating companies to PT Holdiko Perkasa.

    As direct and indirect shareholder of these companies, it is Holdiko’s responsibility to supervise each individual company with the aim of disposing of a sufficient amount of these shareholdings. Holdiko will subsequently direct the disposal proceeds to Ibra as part of the settlement agreement.

    The Indonesian Bank Restructuring Agency (Ibra) is an agency of the government of Indonesia established at the beginning of 1998 as the primary agency to oversee the rehabilitation of the financial sector. Ibra is authorised to take over and control troubled banks and dispose of their assets and collateral.