Krakatau Steel, Waskita Karya, Garuda, Adhi Karya to Proceed Rights Issue

TheIndonesia.id - State-Owned Enterprises (SOEs) Minister Erick Thohir has said that his ministry has increased the capital of five state-owned companies through a rights issue scheme to maintain the financing of the companies.

"It should not be called debt anymore. There are various kinds of corporate attempts, whether it is increasing capital through the government's role, corporate actions in the market, strategic partnerships, and so on," he said in a statement quoted by Antara on Thursday, August 18, 2022.

A total of five SOEs will implement the rights issue—state-run bank PT Bank Tabungan Negara (BTN), steel manufacturer PT Krakatau Steel (KS), construction company PT Waskita Karya Tbk, national airline PT Garuda Indonesia, and construction corporation PT Adhi Karya Tbk. The minister said that the government only provides additional capital to corporations that have good prospects and potential in the future.

"Do not add capital to the sunset industry," he remarked.

For instance, the government has provided the capital to BTN since the company focuses on providing housing credit to Indonesian people, especially youngsters through the Millennial House Program—which is a collaboration between the bank and state-run railway company PT Kereta Api Indonesia (KAI), he added.

He said he expected that the implementation of the program, which has completed four projects so far, can be intensified since the nation’s housing needs are projected to reach more than one million units.

Meanwhile, the provision of additional capital for PT Krakatau Steel is aimed at strengthening the national steel industry ecosystem since Indonesia still needs to import the commodity to meet domestic demand.
Thohir noted that some of the imported steel was smuggled. Hence, his ministry intended to improve the performance of the company, as earlier, it suffered losses for eight years. However, in the second quarter of 2021, the corporation enjoyed a profit of Rp800 billion.

Currently, the SOE is cooperating with a South Korean company, Posco, to produce vehicle parts to support the electric car industry in Indonesia.
Hence, the minister said that PT KS is a promising company to be provided with additional capital.