Indonesia’s Krakatau Steel to divest power plant unit to public sector PLN

Photo: Reuters

Indonesia’s state-owned company Krakatau Steel is divesting its power plant subsidiary Krakatau Daya Listrik (KDL) to another public sector electricity company Perusahaan Listrik Negara (PLN), CEO Silmy Karim said.

The company will sell around 80-100 per cent stake of KDL for around Rp2 trillion ($141.2 million), as reported by Investor Daily.

The two state-owned companies are still in negotiations and the deal is targeted to close by the year-end. According to Krakatau Steel’s financial report by June 2019, KDL noted an asset value of $230.57 million.

KDL has been operating since 1996 with five electric-steam power plants of 400MW capacity. The divestment of KDL is in line with Krakatau Steel’s restructuring process, Karim said.

The company initiated the restructuring process early this year to rejig its debt levels.

The restructuring process is expected to run in three stages that include improving the company’s financial performance, divesting non-core subsidiaries and issuing convertible bonds.

Some banks that provided loans to Krakatau Steel include Bank Mandiri, Bank Rakyat Indonesia, Bank Negara Indonesia, Bank CIMB Niaga, Bank OCBC NISP, Bank DBS Indonesia, Bank Central Asia, Bank Danamon, Indonesia Exim Bank and Standard Chartered.

Aside from KDL, Krakatau Steel also plans to divest three other subsidiaries, possibly through an initial public offering in Indonesia Stock Exchange. Those three subsidiaries are Krakatau Tirta Industri, Krakatau Bandar Samudera and PT Krakatau Industrial Estate Cilegon.

Although an IPO plan is in the pipeline, Krakatau Steel may also divest the stake to a strategic player. In March 2019, the state-owned seaport operator Pelindo II once announced its intention to acquire 49% of Krakatau Bandar Samudera for Rp1.7 trillion ($109.04 million). Meanwhile, state-owned construction company PT PP also announced the acquisition plan of Krakatau Tirta Industri.

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.