JAKARTA (TheInsiderStories) – State manufacturer, PT Krakatau Steel Tbk (IDX: KRAS) will form an infrastructure subholding consisting of energy supply, industrial water supply, ports and industrial areas, said the CEO today (04/07). The new entity will manages PT Krakatau Daya Listrik, PT Krakatau Tirta Industri, PT Krakatau Bandar Samudera, and PT Krakatau Industrial Estate Cilegon.
Accroding to the CEO, Silmy Karim, the formation of the subholding aimed to optimize the performance of the company and to provide integrated solutions for business partners and customers of each company. The four subsidiaries recorded total sales of Rp2.4 trillion with a net profit of Rp420 billion in 2020.
He targeting the formation of the new subholding will finalize in May 2021 and will be offer to the Indonesia Investment Authority. Beside form the subholding, Krakatau also plans to develop the floating solar power generation project through Krakatau Tirta Industri. The unit will collaborating with PT Akuo Energy Indonesia, part of a group of renewable energy companies from France, Akuo Energy SAS.
Karim said, this renewable energy project has a total investment of $14 million and will have an initial capacity 16 megawatts (MW) and saving an electricity costs of Rp7.8 billion per year. Thei project is planned to operate commercially by the end of 2022. The subsidiary is targeting the power plant will have capacity 40 MW in the future.
Earlier, the state firm has injected a fresh capital Rp798 billion to Krakatau Tirta Industri, bring a total equity participation of Rp818 billion. Karim explained, the additional capital was prepared to strengthen the capital structure of the unit before listing in the capital market.
Currently, the subsidiary is working on a drinking water supply system project in Gresik, East Java, collaborating with PT PP Tbk (IDX: PTPP) with a capacity of 1,000 liters per second. Another project joined with PT Adhi Karya Tbk (IDX: ADHI) to build a SPAM in Kendari, Southeast Sulawesi, which is planned to be completed by the end of 2021.
Krakatau Tirta Industri is also targeting water supply projects for PT Amman Mineral in Sumbawa, West Nusa Tenggara, and drinking water management in Batam, Riau. Karim reported, in 2020, the unit posted a net profit of Rp174.3 billion from a year agod amounted to Rp153.5 billion.
To supprt the plans, the steel producer has issued mandatory convertible bond (MCB) worth of Rp2.2 trillion to PT Sarana Multi Infrastruktur. The notes have a tenure seven years and will be converted into shares in 2027. In total, said the finance director, Tardi, the company will get capital injection worth of Rp3 trillion. The remaining Rp800 billion will be releases at the end of 2021.
The issuance, said Tardi is part of the government to injects capital to Krakatau in the context of National Economic Recovery program, which was agreed on Oct. 6. The funding, he continued, will be use to support the upstream projects and to refinances part of the company’ debt.
The share owned by the public will be diluting from 20 percent to a around 14 to 16 percent caused of the corporate action. After the issuances of MCB will be followed up by rights issue program to maintained the public ownerships stay at 20 percent.
Since last year, Krakatau plans to finalize the debt restructuring amounting to $2.2 billion. Karim stated that the issuer still has debt with four banks such as PT Bank CIMB Niaga Tbk (IDX: BNGA), Standard Chartered Indonesia, PT OCBC NISP Tbk (IDX: NISP) and PT Bank DBS Indonesia, which reached 22 percent of its total debt.
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