Krakatau Steel to Pay Off $524 Million Debt in 2023

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- PT Krakatau Steel (Persero) Tbk., or KRAS, plans to pay off a debt of $524 million, equivalent to IDR 8.2 trillion (Jisdor exchange rate IDR 15,731 per US dollar), in 2023 as part of Tranche B.

The CEO of Krakatau Steel, Silmy Karim, announced that KRAS will negotiate the extension of the debt payment until the end of 2023. The extension of the debt payment is due to the fact thatKRAS is preparing funds to pay off the debt of $524 million.

"We did request an extension for the Tranche B to be paid off in 2022 until 2023," Karim said during a public presentation by Krakatau Steel on Friday (30/12/2022).

He explained that the funds for the payment of KRAS' debt will come from various sources, including $120 million from internal sources and $200 million from the divestment of three subsidiaries, namely 70% of Krakatau Daya Listrik (KDL), 49% of Krakatau Tirta Industri (KTI), and 49% of Krakatau Bandar Samudera.

There will also be $70 million in asset securitization, $100 million in cash flow, and the rest will come from internal cash.

"So we as management are optimistic that the $524 million debt of Tranche B will be paid off in 2023," he said.

He added that by paying off the $524 million debt, the remaining debt of Krakatau Steel will significantly decrease.

Previously, Karim projected that the remaining debt of $1.7 billion, equivalent to IDR 26.7 trillion, could be paid off within 17 years. He stated that KRAS has already paid off a debt of $487 million, or around IDR 7 trillion, and has also paid annual interest.

"So we are grateful for the restructuring and transformation process, although it has not yet been able to complete such a large debt, it is on the right track because we have paid around IDR 7.5 trillion, from the original $2.2 billion, down to around $1.7 billion," he said.

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