Jakarta, CNBC Indonesia – PT Krakatau Steel (Persero) Tbk has debt maturing in September reaching US$ 524 million or around US$ 7.81 trillion (Rp 14,918/US$). The company will take several steps to pay off the debt.
Krakatau Steel’s Finance Director Tardi said the maturing debt would be paid through company funds, as well as corporate actions that would be taken.
“For debt maturing US$ 524 million, there is an initiative to cooperate with strategic partner Posco,” he explained, in a Hearing Meeting with Commission VI DPR RI, Thursday (30/6/2022). From this strategic partnership, Tardi estimates that Krakatau Steel can get a cash return of around US$ 90-100 million. The funds will be used to repay the debt.
In addition to cooperation, the Company will also optimize assets such as land that will be transacted with subsidiaries, for example to be used as warehouses, industrial areas, port facilities. From this corporate action, the Company is expected to generate cash flow of US$ 150 million.
Other corporate actions include divesting subsidiaries, from Krakatau Bandar Samudera, Krakatau Tirta Industri, Krakatau Infrastructure Facilities, Krakatau Industrial Estate. Subsidiaries that have good Ebitda will be divested even though they are only a minority.
“So to cover (debt) of US$ 524 million, there are funds from there,” he said.
In addition, Krakatau Steel also plans to issue new shares or rights issue, with the collected value reaching IDR 2.5 trillion. However, this is only used as a backup plan or contingency plan if it is still insufficient to cover the debt.
“The number of new shares to be issued is 6.4 billion shares, with a share price of Rp 360 per share. Last year, at the best time to touch Rp 500 per share, we expect to get Rp 1.8 trillion – 2.5 trillion,” he explained.
The maturity date of the debt is in September 2022.
Source: cnbcindonesia.com.sg June 30, 2022