The Indonesian government aims to finalize a loan restructuring agreement next month between PT Krakatau Steel, the nation’s largest steelmaker, and its lenders, as reported by Bloomberg.
Discussions have been ongoing regarding a master restructuring agreement after a previous deal. The total amount to be restructured is approximately USD 1.5 bln in rupiah-denominated and other loans.
Founded in 1970, Krakatau Steel has faced challenges from cheaper imports, particularly from China. The company sought government support to protect the local industry after completing a USD 2 bln debt restructuring in 2020, following President Joko Widodo’s call to reduce low-quality steel imports.
A fire at one of Krakatau’s plants last year further complicated matters, leading its finance director to indicate a need for loan restructuring. Debt pressures have also affected Indonesia’s construction industry, with PT Waskita Karya and PT Wijaya Karya signing USD 3 bln in debt restructuring deals this year amid a push for new infrastructure projects.
