JP/Government to auction 400 property assets

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JP/Government to auction 400 property assets - 01 Sep 06 14:48

Government to auction 400 property assets

The Jakarta Post, Jakarta

Asset Management Company (PPA), a state agency set up to manage assets formerly handled by the Indonesian Bank Restructuring Agency (IBRA), is putting 400 of its property holdings up on offer in an open auction, to help finance this year's budget deficit.

The proceeds from the property assets sale will supplement the company's main revenue generator, the selling of government shares at several private banks, PPA head Syahrial said Thursday.

He did not elaborate on the value of the property assets, or when the auction would be held, saying PPA would provide all the needed information to investors through its website ( in due time.

"We are of course expecting to raise the highest possible proceeds from the sale, which will be held before the end of this year," Syahrial said, after the signing of an electronic-based auctioning system for the assets, with the Finance Ministry's Director General of State Claims and Auctions, Machfud Siddik.

"We are offering 400 property assets, half of them being apartment units."

The assets are located in the country's five main cities -- including Jakarta and Medan.

PPA, a unit under the Finance Ministry which took over the management of assets from banks bailed out by the now-defunct IBRA during the 1997-1998 Asian financial crisis, still held at the end of last year 5,199 assets worth Rp 8.9 trillion (US$978 million).

Property assets -- including 219 apartment units in South Jakarta's Puri Casablanca -- make up 3,935 of the holdings, at a value of Rp 3.1 trillion.

PPA also manages the government's 25.9 percent stake in Bank Permata and 5.24 percent stake in Bank International Indonesia (BII), which it expects to sell this year as well.

The company had recently asked the Finance Ministry to set the value of all the properties it holds so that they can be sold by this year. The 400 properties are part of 600 properties already valued by independent auditors as well. Some 1,500 remain to be valued.

PPA is expected to contribute some Rp 2.35 trillion in cash to the state budget this year through the disposal of the assets.

It has contributed some Rp 250 billion to state coffers so far this year.

PPA had contributed Rp 6.01 trillion last year, from its Rp 5.12 trillion target. This included Rp 2.19 trillion in proceeds from the sale of the government's remaining 5.02 percent stake in Bank Central Asia (BCA) and Rp 2.68 trillion from its 10.5 percent shares in Bank Danamon.