Jakarta, CNBC Indonesia – The issue of bankruptcy at the state-owned steel producer, PT Krakatau Steel Tbk (KRAS) has surfaced recently. This statement is not arbitrary, but from SOE Minister Erick Thohir during a meeting with Commission VI of the House of Representatives (DPR).
Krakatau Sarana Infrastruktur (KSI) Commissioner Roy Maningkas believes that PT Krakatau Steel Tbk (KRAS) will not go bankrupt this December. This is Roy’s response to Minister Erick’s statement that the state-owned steel producer will go bankrupt at the end of December if he does not take a number of restructuring steps.
“What is clear is that Pak Erick Thohir’s statement as the SOE minister in charge of Krakatau Steel is an unwise statement. It even tends to harm KS who incidentally is her son can,” said Roy, to CNBC Indonesia, Tuesday (6/12/2021).
He said that KRAS still has subsidiaries that recorded profits, such as the KS Group subholding, Krakatau Sarana Infrastruktur (KSI). Roy said, KSI is now a cash cow for the holding company KS. This company contributes 50 percent to the holding’s EBITDA with a net profit of around Rp 500 billion this year. Roy even asked Minister Erick to bet Rp 1 billion if KS really went bankrupt by the end of this month.
“I will pay the minister. On the other hand, if KS persists without doing what the minister asks, I will donate the Rp1 billion to the poor,” he added.
Roy said, KS was in a difficult condition. But the management has done their best and now the condition is starting to improve. As a strategic asset, KS should be treated strategically as well. Do not just because there is a certain motive, KS becomes a victim of certain interests.
“The statement was very careless, and not true. I deny it and I am ready to take the risk,” he said.
Roy further added that to settle KS’s obligations to a number of its creditors, the company already has a number of plans. Including releasing share ownership in KSI up to 40 percent. However, said Roy, recently there has been a demand for KSI to sell up to 70 percent of its shares by 2023. This will actually harm KS as the majority shareholder. Because KSI is an important asset and cashcow of KS. Even now, around 50 percent of KS’s EBITDA comes from KSI.
Roy asserted, in fact he did not like to bet. But he had to do that to convince the people that this transaction was not right. According to Roy, he is not against KSI’s divestment. But if the divestment has to be carried out up to 70 percent, it will definitely harm KS and the state.
“I think the minister is also dishonest when he says that only INA (Indonesia Investment Authority) wants to buy KSI. Please, put the interests of the state first, not groups let alone individuals,” added Roy.
Previously, in front of Commission VI of the DPR, the SOE minister said, to save Krakatau Steel, there were three steps. The problem is the third step is stuck. There are two restructurings that must be carried out by Krakatau Steel, one renegotiation with POSCO is also not easy.
“But one of them is currently crucial, if the third fails, the second fails, and the first fails, then this December (Krakatau Steel) could default,” he said.
Erick revealed that the Investment Management Institute (LPI) or the Indonesia Investment Authority alias INA would invest in Krakatau Steel.
“One of them we actually invite, this is not oranges eat oranges, INA is for investing, INA is actually for us to invest, so the goods don’t run out,” said Erick.
(sys / hps)
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