Harian Berita Sore

Jakarta ( Berita ) :  The state enteprises minister supports PT Krakatau Steel’s efforts of seeking foreign bank loans for intensified boosting of its production capacity.

“We are supporting the company’s efforts  of seeking  funds from foreign banks because of the uncertainty about the implementation of its initial public offering in the capital market,” Minister  Sofyan Djalil said here on Friday.

He said that in the current financial crisis companies had to be able to explore funding sources so that their investment plans and targets could be met.

“We have told the management of the company to immediately seek loans because  capital market cannot be relied upon,” he said.

PT Krakatau Steel has received a go-ahead  from the House of Representatives to conduct an initial public offering this year  dropping its strategic sales plan.

The company hoped to raise Rp2 trillion to Rp2.3 trillion from the IPO but it was certain that the plan would be cancelled because of the present unfavorable share market condition.

Sofyan said that by cooperating with the ECA which is a consortium of a number of banks in Europe the government was expected to be able to secure the company’s debt.

He would not tell the amount of funds PT Krakatau Steel would seek from the ECA. “I do not know but the credit will be used for developing the company’s production capacity from 2.5 million to five million tons by the purchase of new mines in a number of regions,” he said.

 PT Krakatau Steel until 2012 needs an investment of up to Rp16.4 trillion to support its business development plan.

 The minister admitted that under the  current conditions it was difficult for a company to seek loans. However efforts have to be made so that the expansion plan and sustainability  of the company’s operations could be secured. ( ant )