Debt Payment Committee, What is the Krakatau Steel Debt Restructuring Scheme?

PT Krakatau Steel (Persero) Tbk, or KRAS, and its loss-making subsidiaries entered into a loan restructuring agreement with creditors in September 2019. This agreement was subsequently amended in December 2019 and January 2020.

KRAS's financial statements show that the debt restructuring with creditors was divided into three tranches: Tranche A, Tranche B, and Tranche C. The agreement stipulated principal and interest payments until 2020 for Tranche B, and until 2027 for Tranches A and C.

The total long-term debt of KRAS and its subsidiaries that underwent restructuring amounted to US$1.64 billion (equivalent to Rp 23 trillion) as of September 2021. This comprised Tranche A (US$192.82 million), Tranche B (US$536.16 million), and Tranche C (US$911.75 million).

Bank BNI acted as the facility agent, security agent, and collection agent. Under the restructuring agreement, all loans in US dollars carried a 4% annual interest rate, while loans in Indonesian Rupiah carried a 6% interest rate.

The assets of the state-owned steel company were valued at US$3.74 billion as of September 2021. Total liabilities reached US$3.32 billion, while equity stood at only US$420.93 million. From January to September of that year, KRAS achieved a profit of US$59.72 million, compared to a loss of US$27.4 million in the same period of the previous year.