Aug 27, 2010

Krakatau Steel to list 3 subsidiaries

A listed company candidate, PT Krakatau Steel (KS), is planning to privatize three of its subsidiaries through initial public offering (IPO).
Meanwhile, the company will use 19.26% of the IPO funds for financing its business expansion. KS have reviewed every option to release the rest of its shares amounted 10.74% so that later the stock marketed will reaches 30%.
KS President Director Fazwar Bujang uttered the subsidiaries’ IPO is expected to be conducted in 2011.
Currently, the company still focus to hold the public offering.
“We still can not mention the subsidiaries that will be privatized. Certainly, those companies were under KS, we will release some of them to the market next year,” he said today.
Meanwhile, related to the IPO plans, the company said that it would use the funds from the corporate action to financing the expansion.
However, he did not mention the funds proceed in details. In the same opportunity, Fazwar said that the joint venture company between KS and Posco is now effective following the signing of the cooperation agreement between both companies.
Currently, the company possessed 30% shares in the joint venture company while the rest of it possessed by Posco.
“We will increase the portion of shares ownership in Krakatau Posco up to 45% when the established mill start to operate,” he said.
The Joint venture company establishment is expected to give significant contribution toward the financial performance of Krakatau Steel.
The company is optimistic that the steel demands in global market will increases 8% to 10% next year in line with the increase of steel consumption.

Disclosure: No position at the stock mentioned above.

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