The government now owns 95.9 percent of Tuban Petro following the conversion of the petrochemical company’s debts worth Rp 2.62 trillion (US$187 million) into equity.
ebt laden PT Tuban Petrochemical Industries (Tuban Petro) will go ahead with its expansion after the government finally agreed to bail out the East Java-based propylene producer.
Tuban Petro chief executive officer Sukriyanto said the company planned to build new factories and improve existing ones in an effort to strengthen the company’s finances in the future.
The first step will be to increase the production capacity of propylene in one of Tuban Petro’s subsidiaries, PT Polytama Propindo.
Polytama is projected to produce 240,000 metric tons of propylene by the end of this year. With the production expansion, Polytama is predicted to be able to produce up to 350,000 metric tons in 2020.
“The total cost of increasing the production capacity of propylene in Polytama is around US$17.5 million. We will also start operating our first expanded production line later this month,” said TubanPetro chief executive officer Sukriyanto in a press conference on Oct. 18.
The government now owns 95.9 percent of Tuban Petro following the conversion of the petrochemical company’s debts in the form of multi-year bonds amounting to Rp 2.62 trillion (US$187 million) into equity.
“This conversion definitely resolves some of the country's unsolved receivables and at the same time it benefits Tuban Petro as it improves the company's capital structure,” the Finance Ministry's state assets director general Isa Rachmatarwata said at the same event.
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