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BNI gives $70m loan to Timah
JAKARTA: State-run Bank Negara Indonesia (BNI), the nation's third largest lender, agreed Monday to channel US$70 million of standby loans to state mining company PT Timah to complete the building of 10 vessels currently being delayed by the state shipyard company PT PAL
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JAKARTA: State-run Bank Negara Indonesia (BNI), the nation's third largest lender, agreed Monday to channel US$70 million of standby loans to state mining company PT Timah to complete the building of 10 vessels currently being delayed by the state shipyard company PT PAL.
"Currently PAL has about 10 delayed orders, each costing around $7 million to complete," Timah president director Wahid Usman said after signing the loan agreement.
According to Wahid, Timah will benefit from helping the ailing PAL, as the company's subcontractor, because it wishes to learn more about vessel construction to improve the shipbuilding experience of its subsidiary PT Dok dan Perkapalan Airkantung (DAK).
DAK provides dock services and vessel repairs, as well as producing small vessels for Timah.
Under the deal with BNI, Timah is required to finish one vessel at a time before being able to withdraw the remaining loans.
"The construction process will cost less than $70 million," said Usman.
The shipbuilding project will also involve a deal between PAL and state-owned steel company PT Krakatau Steel, which will supply steel at a cheaper price to PAL. The Surabaya-based PAL will need around 14,000 tons of steel to finish the project. -- JP/(dis)
