Krakatau Steel Pledges Assets for Danantara Loan in Restructuring Move

Financial Restructuring Efforts

PT Krakatau Steel Tbk (KRAS), a state-owned steel manufacturer, has taken significant steps to improve its financial condition by pledging company assets worth Rp13.94 trillion. This strategic decision was made as part of a shareholder loan agreement with PT Danantara Asset Management, dated December 19, 2025. The asset pledge, valued at over 50% of the company's assets, is a crucial component of KRAS's broader restructuring plan aimed at restoring financial health.

Regulatory Framework

The asset pledge was conducted in accordance with the State-Owned Enterprises Law (UU No. 19/2003), as amended by UU No. 16/2025. This legal framework allows for such financial arrangements to support the restructuring of state-owned enterprises. The move was approved by the company's shareholders during the General Meeting of Shareholders (RUPS) held on December 23, 2025, demonstrating strong support for the management's restructuring strategy.

Strategic Implications

This financial restructuring is critical for KRAS as it faces challenges in its financial performance. By securing the loan and pledging assets, the company aims to stabilize its financial position and continue its operations effectively. The involvement of PT Danantara Asset Management in providing the loan indicates confidence in KRAS's restructuring plan and its potential for recovery.

Market Context

The steel industry continues to face various challenges, including global market fluctuations and domestic demand variations. KRAS's decision to restructure its finances through asset pledging and shareholder loans reflects the company's proactive approach to navigating these challenges. As a major player in Indonesia's steel manufacturing sector, KRAS's financial health is significant not only for its stakeholders but also for the broader industry.