JAKARTA (TheInsiderStories) – Indonesian government set up PT Bahana Pembinaan Usaha Indonesia (BPUI) as the holding company (holdco) of insurance companies, said the one official last week. While, minister of state own enterprises (SOEs), Erick Thohir, also wants to create pension fund cluster.
Thohir said, the establishment of insurance holding is the first step in saving PT Asuransi Jiwasraya and PT ASABRI from liquidity stress. Beside the two companies, other insurance firms, like PT Asuransi Kredit Indonesia, PT Asuransi Jasa Indonesia, PT Reassurance Indonesia Utama, and PT Reasurance Nasional Indonesia, PT Taspen, PT Asuransi Asei Indonesia also include in the holdco.
Since September 2019, BPUI has been appointed by the government to lead the insurance firms. The plan to form an insurance holding has actually been rolling since 2016 and is planned to form 2017.
“The point is that everything is discussed together with related institutions and ministries,” said BPUI’ CEO, Marciano Herman, as quoted by Tempo, by adding the discussion was related to the capital structure, organization, and the steps ahead would be like.
The ministry had completed a feasibility study related to establishment of the insurance holding. After the finalization of other financial businesses restructuring, the ministry will form a financial services holding to manage four state-owned lender, namely PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Bank Tabungan Negara Tbk (IDX:BBTN), PT Bank Mandiri Tbk (IDX:BMRI), PT Bank Rakyat Indonesia Tbk (IDX:BBRI), and PT Pegadaian under other state-owned financial company, PT Danareksa.
The country’ Financial Service Agency and the central bank have both been pushing for banks to merge to shore up the companies equity. The regulators want only halve of 120 banks operating across the archipelago.
Currently, the unfinished-holdings are infrastructure, insurance, housing, industrial estate, port, defense, pharmacy, cement, and financial sector. The ministry official has mentioned toll road operator PT Hutama Karya will lead infrastructure companies and state-owned property developer, PT Perumnas in housing sector.
But no cleared information the leader of industrial estate, port, defense, pharmacy, cement, and financial sector. Former minister Rini Soemarno has been assigned a special task by President Joko Widodo to merge SOEs under holding in six sectors, namely, mining, oil & gas, infrastructure and construction, housing, financial services, also food commodities.
So far, the ministry has succeed established two holding companies in mining lead by PT Indonesia Asahan Aluminium and Oil & gas holding under energy producer PT Pertamina. The complicated rule and administration become the handicap on the SOEs moves to create new holdco.
The holding companies is very important to strengthen the companies, as well as making them more efficient and transparent. Thus, the reasoning goes, SOEs will gain the capacity to compete not only in the domestic market, but also against multinational corporations on a global scale.
Its expect, the holding establishment aims to ease command and monitoring. It will also be more effective in terms of company’ operation. So state-owned enterprises can act not only as bureaucracy, but also as corporation.
BPUI and its subsidiary companies (Bahana Group) were established in 1973. The Group has five main business pillars like Capital Market, Investment Management, Venture Capital, Investment, and Financial Advisory Services.
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