Home News Indonesia’s Gunung Raja Paksi Build Steel Plant With Chinese Firm

Indonesia’s Gunung Raja Paksi Build Steel Plant With Chinese Firm

PT Gunung Raja Paksi Tbk (IDX: GRP) set the initial public offering (IPO) price in the range Rp825 (US$0.058) to Rp900 a share - Photo: The Company

JAKARTA (TheInsiderStories) – Indonesia’s steel producer, PT Gunung Raja Paksi Tbk (IDX: GGRP) plans to build steel plant with Chinese firm with cost around US$693.3 million,” said management on Thursday (09/19).

The company’s president director Alouisius Maseimilian said the signing of the collaboration is scheduled in October and the partnership is expected to be effective in 2020. There were at least seven projects that would be worked on in this collaboration, he added.

He believes the collaboration will increase efficiency in the company’s steel production. At present, the company’s steel production capacity reaches 2.86 million tons (MT) per year. Until the end of 2019, the company targeting could sell 1.25 MT of steel with an average steel price of $724 per ton. To date, the sales are estimated the worth of $906.92 million.

Gunung Raja Paksi has just listed shares on the stock exchange yesterday. The company released shares at a price of Rp840 ($0.05) per share so the total funds that can be obtained from the initial public offering are Rp1.03 trillion.

The company appointed PT UOB Kay Hian Sekuritas as an underwriter of the issuance. Previously, PT Kresna Sekuritas was also the guarantor of the issuance of the emissions. Along with the initial public offering (IPO), the company will issue new shares in the framework of the mandatory conversion bonds that will mature on September 30, 2019.

The number of shares to be issued in the mandatory conversion bonds is 1.68 billion shares or Rp 1.41 trillion. With the implementation of the IPO and mandatory conversion bonds, public share ownership will be 10.16 percent.

Maseimilian said, according to plan, as much as 99.52 percent of the procedure would be used to pay off the debt in the context of purchasing fixed assets and operating costs. The remaining 0.48 percent will be used for working capital.

Established in late 2001, Gunung Raja Paksi is in charge of producing flat steel products consisting of plates (sheet) and coils. It has combined annual production capacity of 2.800.000 tons of wide range of hot-rolled flat products.

Established in late 2001, Gunung Raja Paksi is in charge of producing flat steel products consisting of plates (sheet) and coils. It has combined annual production capacity of 2.800.000 tons of wide range of hot-rolled flat products.

Gunung Raja Paksi’s sales are dominated by the domestic market. The company concentrates more than 95 percent in the local market to supply domestic development. Between 3 percent to 4 percent is for exports to several countries, said Maseimilian in a press conference days ago.

Some export destinations for Gunung Raja Paksi include the Philippines, Malaysia, Australia, and the United States. Maseimilian said the company’s revenue last year reached $867 million, with an export composition of $40 million.

In the first quarter of 2019, the company’s sales were recorded at $212 million, down about 15 percent from the previous year. The decrease was caused by a large number of industries and infrastructure projects that were still in wait and see conditions, political years, campaigns, Eid periods, others.

US$1=Rp14,000

Written by Staff Editor, Email: theinsiderstories@gmail.com