Mandiri, Krakatau sign liquidity agreement

JAKARTA: Indonesia’s top lender Bank Mandiri will serve state steel maker Krakatau Steel in its liquidity management through an “intercompany notional pooling dual currency” service after signing an agreement in Medan recently.

Fransisca Nelwan Mok, Mandiri’s corporate banking director, said the dual currency service was expected to optimize Krakatau’s liquidity in its operational activities given that half of the revenues of the steel maker’s subsidiaries were made in foreign currency.

“The service is expected to be a strategic solution for Krakatau Steel Group to optimize its idle foreign currency liquidity and increase the daily operational effectiveness,” Fransisca said in a statement released Sunday.

Krakatau Steel currently has 10 subsidiaries operating seven manufacturing plants with a total production capacity of 2.75 million tons of steel per year, projected to rise to 4.25 million tons by 2014. — JP