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Wednesday November 22nd 2017

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Krakatau gets more shares in venture with Posco


After prolonged negotiations, state-owned steel maker PT Krakatau Steel has finally secured a bigger portion of ownership in a joint venture with Korea’s PT Pohang Steel Iron Corporation (Posco).

State-Owned Enterprises Minister Mustafa Abubakar said Krakatau would control 45 percent of the planned steel plant in Tangerang, Banten, with the remaining shares going to Posco.

The companies would sign a joint venture agreement by the end of July, two months later than originally planned.

The portion of shares owned by each company, however, does not reflect the share of investment in constructing the plant.

Posco will be responsible for 70 percent of construction costs while Krakatau the rest, as stated in the preliminary agreement in December, Mustafa said.

He declined to elaborate on why the plant ownership composition did not reflect the initial share of investment as agreed in preliminary negotiations between the two companies.

“Posco insisted on controlling 70 percent of the shares, while Krakatau also demanded 45 percent, so this is a compromise solution for the two companies,” he said. [Read More]