Jakarta. Indonesia's sovereign investment fund Danantara plans to reinvest approximately $12 billion (Rp 200 trillion) in dividends received from state-owned enterprises (SOEs), as it seeks to build a sustainable investment portfolio while accelerating a sweeping restructuring of government-owned businesses.

Danantara Chief Operating Officer Dony Oskaria said Monday that the dividend proceeds would be managed through Danantara Investment Management (DIM) to support the fund's long-term investment activities.

The reinvestment process would be conducted cautiously, with oversight involving the Attorney General's Office, state auditors and the Corruption Eradication Commission (KPK), he said.

"This year, we expect to allocate at least Rp 200 trillion, or approximately $12 billion, for reinvestment," Dony said in Jakarta.

The planned allocation comes as Danantara targets net profit of Rp 360 trillion ($21.6 billion) this year, following a series of financial adjustments and restructuring measures across its portfolio.

He didn't clarify whether the Rp 360 trillion profit target represents its consolidated net earnings, the combined profits of state-owned enterprises under its management, or another financial measure.

Dony described the projected earnings as "real profit," saying Danantara had recognized Rp 135 trillion ($8.1 billion) in impairment charges over the past 18 months.

Impairment charges are accounting adjustments that recognize a decline in the recoverable value of assets.

Dony said Danantara had also taken steps to contain losses and improve operational efficiency through the restructuring of state-owned companies.

According to him, the organization has closed 364 state-owned enterprises as part of a broader effort to streamline the sector.

"In 18 months, we have undertaken the largest corporate restructuring in the world, restructuring 1,074 companies. Ultimately, only 250 companies will remain," Dony said.

The consolidation effort is intended to reduce the number of state-owned businesses under Danantara's management and create a more streamlined corporate structure.

The planned dividend reinvestment and restructuring measures form part of Danantara's strategy to strengthen the financial performance of its portfolio and generate returns for future investments.

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