Jakarta, CNN Indonesia —
Minister BUMN Eric Thohir mention PT Krakatau Steel (Persero) Tbk could go bankrupt (default) this December if three restructuring efforts fail. He stated that in a Working Meeting with Commission VI DPR RI last Thursday (2/12).
Erick said the issuer with the code KRAS will go bankrupt on December 31, 2021 if the related parties do not take a number of steps, one of which is selling the Krakatau Steel sub-holding, namely PT Krakatau Sarana Infrastruktur.
The three restructuring efforts in question are, first, getting out of the stalled factory construction project blast furnace for US$850 million starting in 2008.
Erick said that there were Chinese investors who wanted to take over the project. However, because steel prices were high and the estimated cost of building factories had doubled, the investment failed to materialize.
Second, negotiations with the steel company Posco as the largest shareholder of Krakatau Steel. Erick wants to take over the majority of the company’s shares. However, until now there has been no answer from Posco.
While the third, injecting investment funds from the Investment Management Institute (LPI) or the Indonesia Investment Authority alias INA.
“This is crucial if the third (step) fails, the second fails, the first fails, this December (KRAS) can be done default,” said Eric.
So, how bad is Krakatau Steel’s financial picture?
The company recorded a net profit of Rp853 billion as of the third quarter of 2021. According to the President Director of Krakatau Steel, Silmy Karim, the profit was contributed by increased sales, increased efficiency, and contributions from subsidiaries.
Through an official release, Silmy said the sales volume of steel pipe products, long product and steel plates increased by 36.9 percent to 1,592,282 tons compared to the same period in 2020 of 1,162,532 tons.
The company’s sales value was recorded at Rp23 trillion in the third quarter of 2021, an increase of 71.5 percent if the same period was the same as last year.
Sales of downstream products also experienced an increase in sales volume by 656.2 percent to 13,181 tons during that period.
Meanwhile, Krakatau Steel’s EBITDA increased by 136.5 percent in the third quarter of 2021 by IDR 1.7 trillion compared to EBITDA in the same period last year, which was IDR 745.1 billion.
Not only in the third quarter of 2021, previously Erick also showed off Krakatau Steel’s financial performance to President Joko Widodo (Jokowi). The reason is, KRAS was able to ‘juggle’ the losses for the last 8 years into a profit of Rp. 609 billion.
Not accepting that the parent company PT Krakatau Sarana Infrastruktur (KSI) is said to be going bankrupt, PT KSI Commissioner Roy Maningkas also invites SOE Minister Erick Thohir to bet Rp1 billion. He is confident because he sees that his financial condition has started to improve.
He said that as a strategic asset, KRAS should be treated with strategic objectives as well. He warned that because of certain motives, KRAS should not become a victim of the interests of unscrupulous persons.
“I used to be a commissioner at Krakatau Steel and now in the KSI subholding. I believe and believe that Krakatau Steel is not as bad as the SOE minister said,” he said.
Roy further added that to settle Krakatau Steel’s obligations to a number of its creditors, the company already has a number of plans. Including releasing share ownership in KSI up to 40 percent.
However, Roy said, recently there has been a request for 70 percent of KSI’s shares to be released until 2023. He thinks this will actually harm Krakatau Steel as the majority shareholder.
The reason is, KSI is an important asset and Krakatau Steel’s financial cash. In fact, he said that currently around 50 percent of the company’s EBITDA comes from KSI.
“I think the Minister is also dishonest when he says that only INA (Indonesia Investment Authority) wants to buy KSI. Please, put the interests of the state first, not groups let alone individuals,” added Roy.
(well / eight)
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