Krakatau Steel Seeks Massive Funding from Danantara

Conditional Financial Support

State-owned steel manufacturer PT Krakatau Steel (Persero) Tbk (KRAS) has formally requested Rp 8.27 trillion (approximately USD 500 million) in funding support from Danantara, a state-owned investment company. The request has been met with cautious optimism by Danantara's management, who are conducting a thorough review of Krakatau Steel's current business operations and financial standing.

Comprehensive Business Review

Dony Oskaria, COO of Danantara, emphasized that any potential funding will not be provided without thorough examination. "We're currently reviewing Krakatau Steel's business model to ensure it has healthy business prospects," Dony explained. This review process involves assessing various aspects of the company's operations, including its financial management, operational efficiency, and market positioning.

Conditions for Funding

The funding support from Danantara is conditional upon two main factors: business restructuring and management commitment to cost efficiency. Dony stressed that simply injecting capital without addressing underlying business issues would be ineffective. "It's not just about providing money; we need to turn around their business model," he added. The management of Krakatau Steel is expected to demonstrate a strong commitment to improving operational efficiency and reducing unnecessary costs.

Strategic Importance

The potential funding support for Krakatau Steel is significant not only for the company but also for Indonesia's strategic steel industry. As a state-owned enterprise, Krakatau Steel plays a crucial role in the country's industrial development. The success of this funding initiative could have positive ripple effects on various sectors that rely on steel production.