Including Garuda Indonesia And Krakatau Steel, Five Red Plate Companies Will Be Rights Issue, Minister Of SOEs: Don't Call It Debt Again

Illustration. (Photo: Doc. Antara)

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir gave a clear explanation regarding the plan to increase capital through rights issue of six state-owned companies on the Indonesia Stock Exchange (IDX). Erick said, the corporate action was aimed at maintaining capital.

The six SOEs in question are PT Bank Tabungan Negara (Persero) Tbk (BBTN), PT Krakatau Steel (Persero) Tbk (KRAS), PT Waskita Karya (Persero) Tbk (WSKT), PT Garuda Indonesia (Persero) Tbk (GIAA). , and PT Adhi Karya Tbk (ADHI).

"Don't say debt anymore, there are various kinds of corporate actions. Is it increasing capital from the government's role, increasing capital from market corporate actions, strategic partnerships, and so on," Erick said in a statement to the media in Jakarta, Thursday, 18 August.

Erick admitted that he did not just give a green light for BUMN to conduct a rights issue. He said the additional capital was intended only for state-owned companies with industries that had good prospects and potential in the future.

For example, BTN which focuses on poor housing for the community, including the younger generation who now make up the majority of Indonesia's population. SOEs, said Erick, must provide a way out of the young generation's difficulties in finding housing

"There must be a solution, when the rich get a house, our new generation can't buy a house. That's why we have a program called the Millennial House in which BTN and KAI cooperate," he said.

Erick said, the millennial house, which is located next to the train station, applies a cross-subsidy system with the difference being in the quality of the interior, such as the type and model of the toilet to the ceiling.

"We have done four completed projects, we want to push even more because the housing needs are almost one million more if I'm not mistaken. This means that capital must be strong, but business and the future must be good. Don't just add more capital, but sunset industry," he said.

Erick said that additional capital was needed by Krakatau Steel in strengthening the national steel industry ecosystem. According to Erick, the domestic steel sector is also facing challenges due to illegal steel imports.

"This means that some of these imported steels are official and some are smuggled, this is ultimately not good for building our industry. That's why we are restructuring at Krakatau Steel, which for eight years in a row has lost, now we have made a profit of Rp800 billion," he explained.

However, Erick admitted that he was not satisfied just stopping here. To that end, Erick encouraged Krakatau Steel to cooperate with Posco in improving the national steel industry with Posco focusing on car plates for electric battery vehicles.

Erick assessed that this focus is part of the electric vehicle ecosystem where Hyundai makes cars, LG makes batteries, then Krakatau Steel and Posco make car plates.

"This is an ecosystem that previously, if there were no goods, then imports, it was a project of US$3.2 billion or more than Rp. 50 trillion, 50:50, this is what we encourage," he said.

Erick assessed that Krakatau Steel needed capital because there were indeed promising new investments and not just making projects.

"This is what I don't like, it's always SOE directors, I'm not saying that now, those who previously made unclear projects, in the end many stalled," said Erick.