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Jakarta Post

Krakatau Steel to list three subsidiaries in major reorganization plan

  • News Desk

    The Jakarta Post

Jakarta   /   Mon, July 22, 2019   /   12:45 pm
Krakatau Steel to list three subsidiaries in major reorganization plan A worker checks a steel furnace at the PT Krakatau Posco plant in Cilegon, Banten, in this 2015 file photo. (Kompas/Iwan Setiyawan)

As part of a major corporate reorganization, state-owned steel producer PT Krakatau Steel plans to publicly list three of its subsidiaries. 

Krakatau Steel president Silmy Karim identified the three subsidiaries as PT Krakatau Tirta Industri, PT Krakatau Bandar Samudera and PT Industrial Estate. 

“We’re still thoroughly considering whether we should optimize our corporate synergy before holding an initial public offering [IPO] or the other way around,” Silmy said last Friday as quoted by kontan.co.id. 

He said that the three subsidiaries would go public in three years at the latest.

Krakatau Steel has spent most of the year focusing on major reorganization in an effort to plug the losses it has suffered over the last six years. In the first quarter, the steelmaker recorded losses of Rp 62.32 million (US$ 4,465.48) due to a significant drop in sales volume and global production costs.

In addition to publicly listing three of its subsidiaries, Krakatau Steel also plans to divest several other subsidiaries, and is focused on raising $1 billion from the sales of non-core assets. 

Silmy said the company needed a strategic partner to help optimize its production line and corporate expansion, as well as increase efficiency. 

“We have invited McKinsey & Company to assess the ideal business structure for Krakatau Steel,” he said, referring to the global management consultancy. (rfa/bbn)