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Saturday, December 19, 2009

Krakatau Steel IPO to be held in October 2010


as published in Bisnis Indonesia daily newspaper
Tuesday, 15/12/2009 00:00 WIB

Krakatau Steel IPO to be held in October 2010

JAKARTA: PT Krakatau Steel (KS) will offer IPO worth about US$135 million in October 2010.

President Director of KS Fazwar Bujang said the fund required by the company in the long run is worth US$450 million. the company seeks loan for 60 percent of the financing and the other 30 percent of the fund generated from IPO, and the rest is from internal cash.

"We plant to have IPO in October with 20-30 percent of the total shares," he said yesterday.

But he rejected to name the securities nominated as the IPO underwriters.

But based on Bisnis record last year, there were three securities appointed to handle KS IPO, namely PT Danareksa Sekuritas, PT Bahana Securities, and PT Mandiri Sekuritas.

Fazwar said the company will use the IPO fund to increase the corporate production capacity to meet the long term target of 10 million tons per year. Some projects here include blast furnace development and other supporting infrastructure such as industry water machine.

Now the production capacity of KS is about 2.5 million tons and increased into 6 million tons from the joint development of South Korea state firm, Pohang Iron and Steel Company (Posco), iin Cilegon.

The integrated steel manufacturer will produce hot-rolled-coils (HRC), slab (HRC and platform steel raw materials), and platform steel. The total investment disbursed to both companies stands at US$6 billion with 30 percent shares ownership of KS and the remaining is Posco's.

VP & Representative Director of Nippon Steel Corp Kozo Uchida said the offering of KS IPO is lucrative. But he could not ensure the incoming Japanese company to become KS shareholder.

"Now we have not made any decision to buy KS stocks. But there is open occasion."

He said the company still concentrates on how to increase the revenue of subsidiary firm of Nippon Steel and KS, PT Pelat Timah Nusantara Tbk (Latinusa). Nippon Steel and consortium of Mitsui Co Ltd, Nippon Steel Trading Ltd, and Metal One Corp are deemed the major shareholders of Latinusa with 55 percent ownership.

KS divested stock possession of Latinusa to the investment consortium together with the subsidiary firm stock listing so the ownership still has 20.1 percent left. The other owner of Latinusa is PT Baruna Inti Lestari with 4.9 percent possession and public of 20 percent.

Latinusa stock price was robust on the opening bell but the slipped IDR25 into IDR300 on the closing bell so that the market capitalization stood at IDR757.01 billion.

President Director of IDX Ito Warsito said the number of emitters listing their stocks in the bourse will be 13 this year as previously targeted.

There are still two emitters to list their stocks in the bourse up to end of the year, namely PT Bank Tabungan Negara Tbk and PT Gunawan Dianjaya Steel Tbk.

Next year, the state emitters that will list the stocks in the bourse include PT Garuda Indonesia, PT Pembangunan Perumahan, dan PT Perkebunan Nusantara III, IV, and VII. (Bisnis/21)

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