TEMPO.CO, Jakarta - State-owned steel company Krakatau Steel (KRAS) announced on Tuesday, July 19, 2016, that it seeks to raise capital by issuing additional shares. The company will hold a rights offering in the fourth quarter this year, issuing more than 4.99 billion new shares.
Krakatau Steel plans to register the rights issuance to the Financial Services Authority (OJK) after a general meeting of shareholders, which is scheduled for August 25, 2016.
The company's management said that the rights offering proceeds will be used to finance the hot strip mill construction project, which is expected to have a capacity of 1.5 million tons.
The proceeds will also be used to build a steam power plant with a capacity of 1x150 megawatts.
Krakatau Steel recently obtained the approval to receive a state equity participation amounting to Rp 2.46 trillion.
The company also has an unused IPO proceed of Rp 928.29 billion, which will also be allocated to finance the hot strip mill project.