Australia's BHP Steel plans to buy Krakatau Steel shares<\/p>\n
JAKARTA (JP): Melbourne-based The Broken Hill Proprietary
\nCompany Ltd's (BHP) steel division BHP Steel is considering
\nbuying shares in state-owned Krakatau Steel, a company
\nrepresentative said yesterday.<\/p>\n
BHP Indonesia president Colin E. Smith told The Jakarta Post:
\n\"We had discussed the issue (the purchase of Krakatau Steel) but
\nno agreements had been made.\"<\/p>\n
Bisnis Indonesia, quoting an unidentified source, reported
\nyesterday that the Australian company planned to buy 25 percent
\nof Krakatau Steel through a private placement.<\/p>\n
Smith said BHP had not yet decided how many shares it would
\nbuy from Krakatau Steel which is Indonesia's largest steel
\ncompany. Krakatau Steel plans to float its shares on local stock
\nmarkets later this year.<\/p>\n
PT Krakatau Steel said earlier it planned to increase its
\nannual production to 7.5 million tons by 2001 from its present
\n2.6 million tons.<\/p>\n
Krakatau Steel President Soetoro Mangoensoewargo said the
\nexpansion program would be financed by the company's planned IPO
\nand bank loans.<\/p>\n
BHP Indonesia has four main businesses here -- copper,
\nminerals, petroleum and steel, and support businesses such as
\nengineering, transport and information technology.<\/p>\n
BHP operates in the steel sector here through PT BHP Steel
\nIndonesia, which built coating and paint lines at Cilegon, West
\nJava in 1993 for about US$55 million, Smith said.<\/p>\n
Smith said his company's relations with Krakatau Steel had
\nbeen very close since the opening of BHP Steel Indonesia's plant,
\nwhich is partly owned Yayasan Dana Pensiun of Krakatau Steel and
\nKrakatau Industrial Estate Cilegon.<\/p>\n
Krakatau imported iron ore from BHP's operation in Brazil and
\nsteel products from its Australian steel plant, he said.<\/p>\n
In return, BHP Steel Indonesia bought raw materials to make
\nits steel building and construction products from Krakatau Steel,
\nhe said. (hen)<\/p>",
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