5 State-Owned Enterprises Will Do Rights Issue, Erick: All to Maintain Capital

  Economy

Minister of State-Owned Enterprises Erick Thohir gave a clear explanation regarding the plan to increase the capital of a number of State-Owned Enterprises such as PT Bank Tabungan Negara (BBTN), PT Krakatau Steel (KRAS), PT Waskita Karya Tbk (WSKT), PT Garuda Indonesia (GIAA), and PT Adhi Karya Tbk (ADHI), through a rights issue mechanism. Erick said the corporate actions of the five State-Owned Enterprises were aimed at maintaining capital.

“Don’t say debt anymore, there are various kinds of corporate actions, whether it is increasing capital from the government’s role, increasing capital from market corporate actions, strategic partnerships, and so on,” Erick said in a statement to the media in Jakarta, Thursday (18/18). /8).

Erick admitted that he did not just give a green light for BUMN to conduct a rights issue . Erick said the additional capital was intended for State-Owned Enterprises with industries that had good prospects and potential in the future.

For example, BTN focuses on providing housing for the community, including the younger generation, who now make up the majority of Indonesia’s population. State-Owned Enterprises, said Erick, must provide a way out of the young generation’s difficulties in finding housing

“There must be a solution, when the rich get a house, our new generation can’t buy a house. That’s why we have a program called the Millennial House where BTN and KAI cooperate,” he continued.

Erick said that the millennial house, which is located next to the train station, applies a cross-subsidy system with the difference in interior quality, such as the type and model of the toilet to the ceiling.

“We have done four completed projects, we want to push even more because the housing needs are almost one million more if I’m not mistaken. This means that capital must be strong, but business and the future must be good. Don’t just add more capital, but sunset industry,” said the former Inter Milan president.

Erick said that additional capital was needed by Krakatau Steel in strengthening the national steel industry ecosystem. Erick said that the domestic steel sector is also experiencing challenges due to illegal steel imports.

“This means, this is imported steel, some are official and some are smuggled, this is ultimately not good for building our industry, that’s why we are restructuring at Krakatau Steel, which for eight years in a row has lost, now we have made a profit of 800 billion rupiah,” said the man who was born the Jakarta.

But Erick was not satisfied just stopping here. Erick said that Krakatau Steel also cooperated with Posco in improving the national steel industry with Posco focusing on car plates for electric battery vehicles. Erick assessed that this focus is part of the electric vehicle ecosystem where Hyundai makes cars, LG makes batteries, then Krakatau Steel and Posco make car plates.

“This is an ecosystem that previously, if there were no goods, they would be imported, it was a US$3.2 billion project or more than 50 trillion rupiah, 50:50, this is what we encourage,” he said.

Erick assessed that Krakatau Steel needed capital because there were indeed promising new investments and not just making projects. “This is what I don’t like, it’s always the SOE directors, I’m not saying that now, those who previously made unclear projects, in the end many stalled,” Erick added.

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