JAKARTA – Bisnis Indonesia: The general meeting of shareholders of PT Krakatau Steel (KS) which took place last week, plans for an initial public offering (IPO) of its subsidiary, PT KHI Pipe Industri, with a target of earning Rp 118 billion.
Amir Sambodo Utama Krakatau Steel said that the AGM also divested 10% of PT Pelat Timah Nusantara (Latinusa) ‘s shares to strategic investors which would then be continued with an IPO in 2008.
“Initially, there were three subsidiaries that would be divested, namely KHI Pipe Industry, Latinusa, and PT Krakatau Medika. However, specifically for Krakatau Medika, it will be reviewed again with two options to be revoked, namely divesting or forming a joint operation for another business entity, “he said yesterday.
He explained that the most appropriate number of KHI Pipe shares is 30%. “Fund of Rp. 118 billion will be used to invest in coating equipment and pipe making machines. In addition, the company plans to refinance its high-supporting debt. “
However, the required amount of funds that will be used to refinance the debt is still being recalculated.
He explained that the funds obtained from the divestment of 10% Latin shares are targeted to generate a minimum fund of IDR 70 billion. The funds, he continued, will be allocated to increase Latinusa’s production capacity, which is currently 130,000 tons per year to 160,000 tons per year.
“After the increase in production increases, we will hold an initial public offering so that the funds obtained can be optimal.”
He explained that the Krakatau Steel GMS had not yet decided on the IPO plan for the steel-producing BUMN.
Currently, the state-owned company owns 93.20% shares in KHI Pipe and 93.87% shares in Latinusa.
Latinusa produces tin sheets as raw material for tin packaging, while KHI Pipe produces spiral steel pipes.
Krakatau Medika was originally a hospital unit that was part of Krakatau Steel. The business activity of Krakatau Medika is a hospital organization located in the industrial area of Cilegon.
Currently, the Krakatau Medika Hospital has 144 beds with a building area of 12,500 square meters on an area of 13.5 hectares.
Joint Venture Company
Amir also explained that the GMS had agreed on the company’s plan to form a joint venture (joint venture) with Al Tuwairqi which required US $ 300 million-US $ 500 million in funds.
Amir also explained that the GMS had agreed on the company’s plan to form a joint venture (joint venture) with Al Tuwairqi which required US $ 300 million-US $ 500 million in funds.
He explained the criteria for the results of the feasibility study showed that this plan could be realized, so the BUMN would collaborate with a new partner.
Amir also explained that the GMS had issued plans for Krakatau Steel to enter the mining business as a minority shareholder.
Al Tuwairqi is one of the leading steel producers in Saudi Arabia and has spread its wings to a number of countries such as Pakistan.
The Al Tuwairqi Group built a consortium with Magnitogorsk Iron & Steel Works of Russia and Arif Habib Securities Pakistan to buy 75% of Pakistan Steel Mills for US $ 361 million.