Krakatau Steel Considering Bonds Issuance

PT Krakatau Steel has been reviewing the plan to issue US$130 million bonds to modernize its facilities.
Regarding with this, the government has postponed the IPO plan of Krakatau Steel from the initial schedule of 2008-2009.
But the IPO plan of two units of Krakatau Steel, PT Pelat Timah Nusantara and PT KHI Pipe Industri, will still be next year.
Krakatau Steel President Director Fazwar Bujang said the company has explained to modernize the facility next year. "We need the investment of US$130 million. Bonds will be a financing alternative apart from the external financing," he said last week.
Krakatau Steel has assigned PT Trimegah Securities Tbk to underwrite the IPO of 35% shares of PT Pelat Timah Nusantara (Latinusa).
PT Danatama Makmur will underwrite the IPO of 32.5% shares of PT KHI Pipe Industries to get the fresh capital of IDR118 billion.
KHI Pipe has appointed PT Danareksa Sekuritas as the financial consultant for the IPO.
According to plan KHI will offer 40.25% or one billion shares to the public at the price of IODR105-IDR115. KHI will also issue 200 million units of warrant.
Krakatau Steel controlled 97.72% shares of KHI and KHI's other shares belong to PT Indhsana.
Last year Krakatau Steel posted the net loss of IDR97 billion, mainly from the loss of the holding company as much as IDR194 billion, meaning that the company failed to meet last year's target. The company has targeted to post the net profit of IDR109 billion last year.