PT Krakatau Steel, Indonesia’s biggest steel maker, said on Tuesday that it would invest $1.2 billion in the first phase of its joint venture with South Korea’s Posco, using funds from its planned $390 million IPO in November.
Fazwar Bujang, Krakatau’s CEO, said the first phase of the joint venture would require investment of about $2.7 billion.
Krakatau, which will have a 45 percent stake in the project, will have a total investment of $1.2 billion, he said.
Fazwar added that the joint venture was due to be signed on Aug. 3 after both parties reached an agreement on the final terms.
“We will use funds from the IPO proceeds this November,” Bujang said. “We’re going to sell as much as 20 percent, partly to finance the project,” he added.
Krakatau Steel aims to raise as much as Rp 3.5 trillion ($388 million) in the IPO, and has appointed Deutsche Bank and Credit Suisse as its international underwriters.
The project will be divided into two phases with construction of the first phase due for completion by the end of 2013 and production due to start in early 2014 with three million tons of annual capacity. Total production will reach six million tons on the completion of the second phase.
Reuters
http://www.thejakartaglobe.com/business/krakatau-to-invest-12b-in-posco-jv/388079
A New Cornerstone of Legal Services in Indonesia
Periodical Review of Indonesian Politics, Economy and Other Public Issues
LGS Newsletter on Various Legal and Business Issues
Government Officials and Prominent Business Actors in Indonesia
Important Addresses You Should Know
