Oct 11, 2010

Krakatau Steel to spend Rp10.21 trio

Indonesia's largest steel manufacturer PT Krakatau Steel (Persero) Tbk plans to spend Rp10.21 trillion capital expenditure from the second half of this year until 2014.
Referring to the IPO prospectus published today, the state-owned steel maker is aiming to allocate Rp1.21 trillion capital expenditure (capex) for production expansion and machinary revitalization.
In 2009, Krakatau Steel produced 1.60 million metric tons of hot rolled coil. The production capacity will be boosted to 3.5 million metric tons by 2013.
The company intends to spend Rp3.31 trillion capex in 2011 and Rp5.69 trillion during the period of 2012-2014.
Today, it announces 3.16 billion shares or 20% IPO scheduled on November 10 2010. The company will use 35.8% of the shares sale proceed to support capital expenditure regarding to revitalization and output capacity expansion. Krakatau Steel is aiming to utilize 24.2% of the proceed as working capital.
The company intends to use 25% of the proceed to finance 388 hectares area for integrated steel plant rolled out with POSCO.
The state-owned steel company will use the remaining proceed to put more capital in two subsidiaries dubbed PT Krakatau Daya Listrik and PT Krakatau Bandar Samudera.
The company has mandated three lead IPO underwriters PT Bahana Securities, PT Danareksa Sekuritas, and PT Mandiri Sekuritas in alliance with two global coordinator Credit Suisse and Deutsche Bank.

Disclosure: No position at the stock mentioned above.
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