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Indonesia’s state-owned mill Krakatau Steel has set the second half of 2010 as the new date for an initial public offering (IPO), president director Fazwar Bujang told MB.
“The market situation has improved a lot compared to last year. We are more confident [in the IPO] now,” Bujang said.
The steelmaker’s plans for an IPO last November were put on hold indefinitely after the global economic crisis and consequent dive in Indonesia’s financial markets.
The company plans to sell 20-25% of its shares in the new IPO, and revenues will fund the construction of a hot rolled plate mill with South Korea’s Posco, and a 1.2 million tpy blast furnace, the company’s first, at the company’s Cilegon works, said Bujang.
The proposed Posco-Krakatau Steel mill will be built in two stages to produce 2.5 million tpy of plate by 2012, doubling to 5 million tpy by 2014 (MB Sep 9).
Construction of the blast furnace will begin in April next year for commissioning in 2012, and will complement its existing five electric arc furnaces (MB Aug 27, 2009).
Krakatau Steel can currently produce 2.5 million tpy of hot rolled coil, 850,000 tpy of cold rolled coil, and 450,000 tpy of wire rod.
It also announced last month that it will sell 20% of its stake in Indonesia’s sole tin producer PT Pelat Timah Nusantara (Latinusa) through an IPO scheduled for November (MB Sep 9).
The move will reduce Krakatau Stake to 73.9% and help raising 300-400 billion rupiah ($30-40 million) funds to expand Latinusa’s capacity to 160,000 tpy from 130,000 tpy.
Krakatau Steel may plan IPO for one or two more of its smaller subsidiaries before its own IPO in the second semester of 2010, said Bujang.
Krakatau Steel owns 9 other steel-related companies, including 120,000 tpy pipe producer PT KHI Pipe Industry and 150,000 tpy bar producer PT Krakatau Wajatama.