Krakatau Steel Targets Debt Restructuring To Be Completed In The First Quarter Of 2025

JAKARTA - PT Krakatau Steel (Persero) Tbk targets debt restructuring to be completed in the first quarter of 2025. The company has also compiled a debt proposal in the form of a change agreement and re-inclusion of the restructuring agreement.

Director of Finance and Risk Management Krakatau Steel Tardi said the company is currently processing approval from the existing 10 creditors. Where some creditors have approved the restructuring proposal submitted by the company.

"Indeed, there are some creditors who have not agreed. But we have confidence in a clearer work plan, with better prospects, we hope that debt restructuring we will be able to conclude in the first quarter of 2025," he said in a virtual public expose of Krakatau Steel, Monday, December 30.

According to Krakatau Steel, there are three distributions of debt repayment that will be made by the company with a total value of 1.5 billion US dollars, and are waiting for creditors' approval. First, tranche A debt with a value of 171 million US dollars which is planned to be completed through optimizing the operational performance of the steel business, including strategic cooperation.

Then, the second is tranche B debt with an outstanding value of 234 million US dollars whose settlement plan is through optimizing the company's assets and divesting its subsidiaries.

"In the divestment of the subsidiary, it is also possible for us to try to explore whether the mechanism is through an IPO or through other financial strategies," said Tardi.

Finally, the tranche C debt with a value of 1.1 billion US dollars, which is planned to be completed through the use of the long-term growth potential of subsidiaries.

"The company believes that with the support of stakeholders including all creditors and the government through the Ministry of SOEs, the company will complete this continued debt restructuring in the near future," he said.

Furthermore, Tardi said that the impact of this restructuring is expected to allow relaxation of principal payments and interest on debt.

Impact will provide a better balance sheet. Where the maturing debts can be reclassified into long-term debts. So that the balanced sheet-based financial ratios will be good," he said.