Krakatau Steel Receives Strategic Rp 4.9 Trillion Shareholder Loan

Financial Support for Restructuring and Recovery

Krakatau Steel (KRAS), Indonesia's state-owned steel producer, has received a significant financial boost through a Rp 4.9 trillion shareholder loan from Danantara Asset Management (DAM) ¹

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Source 2

https://finance.detik.com/bursa-dan-valas/d-8275283/kras-disuntik-danantara-rp-4-9-t-rp-725-m-buat-phk-sukarela

. This strategic funding is part of the company's comprehensive restructuring plan aimed at restoring its financial health and operational efficiency.

Allocation of Funds

The loan facility will be allocated across two main areas: working capital requirements (Rp 4.18 trillion) and restructuring initiatives (Rp 725 billion) ²

. The working capital component will primarily be used for purchasing raw materials for key production facilities, including the Hot Strip Mill (HSM) and Cold Rolled Coil (CRM) plants.

Operational Continuity

The working capital infusion is crucial for maintaining production capacity and ensuring the continuity of Krakatau Steel's manufacturing operations. By strengthening liquidity, the company can better manage its supply chain and maintain production schedules, which is essential for meeting customer commitments and stabilizing revenue streams.

Restructuring Initiatives

The remaining Rp 725 billion will be dedicated to supporting the company's restructuring efforts through a voluntary severance program (Golden Handshake) and pension fund restructuring. This initiative is designed to optimize the company's workforce and financial obligations, creating a more sustainable operational structure for future growth.

Strategic Significance

This shareholder loan is particularly significant as it demonstrates the commitment of both the company's management and its major shareholder to the successful implementation of the restructuring plan. The financial support from Danantara Asset Management is seen as crucial for navigating the challenges faced by the steel industry while positioning Krakatau Steel for future growth opportunities.

Implementation Timeline

The restructuring plan, which was submitted to BP BUMN on November 20, 2025, received approval on December 2, 2025 ²

. The loan agreement was subsequently signed on December 19, 2025, marking a significant milestone in the company's recovery journey.