Krakatau Steel Seeks Rp8.3 Trillion Capital Injection from Danantara Indonesia

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TEMPO.CO, Jakarta - The management of PT Krakatau Steel (Persero) Tbk has submitted a working capital of US$500 million, or Rp8.3 trillion (at an exchange rate of Rp16,602 per U.S. dollar) to the Daya...

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In the short term, Danantara will provide a shareholder loan of $250 million.\"PTKS (PT Krakatau Steel) is proposing financial support from Danantara,\" said Corporate Secretary Fedaus in a disclosure to the Indonesia Stock Exchange on Wednesday, October 8, 2025.The issuer with code KRAS will allocate this short-term capital of US$250 million for main operational needs, including the purchase of raw materials in the form of steel slabs for the HSM plant, hot rolled coil (HRC), and cold rolled coil full hard (CRC F/H) for the CRM plant of PT KBI. Additionally, Fedaus stated that this capital is intended for the HRC of the PT KPI steel pipe plant, as well as for derivative steel products. \"The use of these funds will adjust the working capital needs according to the cash conversion cycle of each facility,\" he said.Meanwhile, Fedaus mentioned that Danantara's additional capital of up to Rp8.3 trillion is intended for completing the company's restructuring, which was made possible by an agreement with the banking sector.Regarding the procurement of raw materials, Fedaus added that the funding comes from third parties at a higher rate than from banking facilities. Additionally, there are limitations imposed by each financier. \"These financing costs immediately become an additional cost of procuring raw materials,\" he said.Fedaus stated that with this capital support from Danantara, Krakatau Steel will now be able to operate optimally and reduce its raw material costs, for which it previously relied on third-party financing. According to the company's analysis, after obtaining financing support from Danantara, Krakatau Steel is projected to increase EBITDA by up to US$31.9 million.According to Fedaus, this situation shows that Danantara's support creates significant added value for all entities. \"With the guarantee of working capital for the HSM facility, PTKS can fulfill the Tranche A restructuring debt with the company's operational cash through the business operations of the HSM facility, \" he said.Krakatau Steel previously announced its relief on debts to four private banks. The total value of Krakatau Steel's obligations that received relief and were accelerated is Rp248 billion (US$159 million).Fedaus said that, in this relief, Krakatau Steel only paid Rp49.6 billion (US$31.8 million). Of that amount, Krakatau Steel received an 80 percent reduction in its total obligation.Additionally, Fedaus stated that Krakatau Steel had the debt, including interest and fines, canceled by the four private banks, amounting to Rp112 billion. Krakatau Steel still has remaining restructuring debts from this settlement, including Tranche A of Rp561 billion, Tranche B of Rp2.8 trillion, and Tranche C of Rp3.7 trillion.Fedaus said that after this transaction, Krakatau Steel will effectively reduce its restructuring debt by up to US$174 million from a total debt of US$1.3 billion, \"a decrease of up to 12.5 percent,\" he said.Meanwhile, Fedaus mentioned that reducing outstanding restructuring debt will automatically reduce the company's interest burden and ease Krakatau Steel's future cash flow issues. He said that this transaction is part of the company's comprehensive transformation. \"At the same time, it reflects the banking sector's support for the sustainability and business prospects of the national steel industry,\" he said.Editor's Choice: Danantara CEO Says Talks Underway with China on High-Speed Train DebtClick here to get the latest news updates from Tempo on Google News","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"shareholding","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.35.12","shortVersion":"4.35.12","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2574380221","isCrawlerRequest":true}