ICBC Indonesia contributes $65 million to syndicated loan for Krakatau Steel’s Blast Furnace Project

On May 15, 2012, PT Krakatau Steel (Persero) Tbk — an Indonesian state-owned enterprise — signed a syndicated investment credit facility with Bank Mandiri, BNI, BRI, OCBC NISP, ICBC Indonesia, CIMB Niaga, and Indonesia Eximbank for a Blast Furnace Project. The loan was provided through two tranches: a $250 million tranche (“Tranche A”) from Bank Mandiri (40%), BNI (40%) and BRI (20%); and a $220 million tranche (“Tranche B”) from OCBC NISP (31.82%), ICBC Indonesia (29.55%), CIMB Niaga (27.27%), Indonesia Eximbank (11.36%). ICBC Indonesia, a subsidiary of the Industrial and Commercial Bank of China (ICBC), contributed approximately $65.01 million of working capital (or 29.55% of $220,000,000). On June 27, 2016, Treaty Amendment and Restatement of Credit Agreement No. 200 was signed, adding Tranche B to the original loan agreement from May 15, 2012 (which only included Tranche A). There were additional amendments to the Credit Agreement on February 22, 2018, and August 21, 2018. Based on the second amendment dated August 21, 2018, the loan will be repaid semi-annually in 20 installments, starting from, at the latest, February 23, 2019. Tranche B bears annual interest at 5.75%. As of December 31, 2018, and 2017, the outstanding payables of Tranche A amounted to $131,292 and $140,620, respectively. Meanwhile, the outstanding payables of Tranche B amounted to $154,234 and US$153,948, respectively. The purpose of the project was to construct a new blast furnace complex — consisting of a Blast Furnace, Sintering Plant, Coke Oven Plant, Pig Iron Caster, Stockyard and Material/Hot Metal Handling — at the Krakatau Steel Plant in the city of Cilegon within Banten Province. Upon completion, it was envisaged that the project would be capable of producing 1,200,000 metric tons per year of hot metal and pig iron. MCC-CERI Consortium and PT Krakatau Engineering (a wholly-owned subsidiary of PT Krakatau Steel) were jointly responsible for implementation. The project commenced on September 8, 2013. By the end of 2018, the project had achieved a physical progress rate of 99.73%; therefore, it is assumed that the project has been completed.

Additional details

1. This project is also known as the Krakatau Steel Plant Expansion Project. The Chinese project title is 印尼喀钢高炉项目. 2. PT Krakatau Steel Tbk. is the largest steel maker in Indonesia, headquartered in Cilegon, Banten. The factory is set on a 280-hectare plot in the western end of Banten and adjacent to the Sunda Strait, and where the Krakatoa volcano and island from which the company takes its name are located.

Number of official sources

10

Number of total sources

12