The Reason for Freeport Acquisition is Funded by Foreign Bank
24 July 2018 10:58 WIB
TEMPO.CO, Jakarta - State-owned PT Inalum reported that the mining holding company has received an indicative offer letter from a foreign bank upon the funds needed to acquire 51 percent of Freeport’s shares.
“There is a letter that has been signed,” said Inalum President Director Budi Gunadi Sadikin at the parliamentary complex on Monday, July 23. However, Budi is yet to reveal the details of the bank.
Regarding news reports on the absence of state-owned banks on funding the Freeport divestment, Budi said the reason is that Inalum was specifically asked to prioritize non-domestic loans.
“It is meant to not overburden the balance of payments and to also avoid putting pressure on our exchange rate, that is experiencing just that,” Budi explained.
Budi further elaborated that in a transaction that has domestic loans flowing to foreign land will create a pressure for rupiah’s exchange rate. This sole reason, he said, is the reason Inalum decided to take-in enough foreign funds.
So far, Budi is certain that many banks are willing to lend its loans to make the transaction happen considering that the loan itself is USD3.85 billion, which is still under Freeport’s gross income of USD4 billion.
CAESAR AKBAR
