Antam is seeking another alternative to finance Ferro Nickel III
Wednesday, March 19 2003 - 02:35 AM WIB
Antam president director Aditya Sumanagara said in Jakarta on Tuesday that the strengthening of the euro against the U.S. dollar might force the company to cancel its plan to raise euro-denominated loan from German bank IKB Hermes in order to reduce costs.
Besides seeking a cheaper option for the funding of the new plant, Antam might also consider to cancel its plan to build a power plant for the project, he said. "One of the alternative to be taken is to cancel the construction of the company?s third power plant," he was quoted as saying.
Based on the company?s calculation, the cancellation of the construction of the power plant would be able to reduce the cost of the project by US$105 million to US$250 million. The company initially predicts that the construction of the nickel refinery and the power plant would cost it about US$360 million to build. The project will be partly financed by euro-denominated loan from German bank IKB Hermes
The recent strengthening of the euro against the U.S. dollar, however, forces the company to review its plan to raise the euro loans worth about US$240 million from the German bank in order to reduce funding cost. For this reason, Antam will soon renegotiate the planned loan with the German bank.
According to Aditya, a number of strategic and funding options are being studied to ensure that the company will be able to reduce the investment risk in the new processing plant. "The final decision will be made by April 1," he added.
The Deputy of State Minister for State Enterprises Roes Ariawijaya has warned that the Antam management should be able to find a cheaper loan alternative to reduce the funding cost of its euro loan.
"The government just want to see the company to continue to book profits," he added. (*)