Facing Bankruptcy, What is the Financial Condition of PT Krakatau Steel?

The Minister of State-Owned Enterprises (SOEs), Erick Thohir, stated that PT Krakatau Steel (Persero) Tbk faces bankruptcy if its debt restructuring plan fails. The Minister of SOEs made this statement at a Working Meeting with Commission VI of the Indonesian House of Representatives (DPR RI) last week.

The stalled investment in the Blast Furnace, worth US$850 million since 2008, is one of the reasons why PT Krakatau Steel is threatened with bankruptcy.

According to published financial reports, the steel company's assets totaled Rp 53.55 trillion in September 2021. This figure increased by 8.9% from Rp 49.17 trillion in December 2020. (Exchange rate: Rp 14,307.01 in September 2021 and Rp 14,105.01 in December 2020).

Meanwhile, KRAS's total liabilities amounted to Rp 47.53 trillion in September 2021. This figure increased by 10.93% compared to the end of last year's figure of Rp 42.84 trillion. Specifically, short-term liabilities surged by 91.83% to Rp 22.39 trillion in September 2021 compared to Rp 11.67 trillion in December 2020. Long-term liabilities, however, decreased by 19.65% to Rp 25.14 trillion in September 2021 compared to Rp 31.17 trillion at the end of 2020.

During the January-September 2021 period, Indonesia's largest steel company recorded a profit of Rp 854.47 billion, compared to a loss of Rp 386.42 billion in the same period of the previous year.