IKB Hermes of Germany offers cheaper loans to Antam

German financial institution IKB Hermes has offered a cheaper loan facility to state owned general mining company PT Aneka Tambang (Antam) to finance the company?s third ferro nickel smelting plant, Bisnis Indonesia reported on Tuesday.

Sources told the daily that the German bank proposed the special offer after the management of Antam decided recently to seek for another source to finance the construction of the smelting plant due to the continued increase in the value of euro against the U.S. dollar.

?Antam had stopped the negotiations to get the loan from IKB Hermes due to the appreciation of euro. But two weeks ago, IKB Hermes, through its representatives, reproposed the loan facility with more attractive term and condition,? the source said.

The source said that IKB Hermes proposed loan of between US$240 million and US$255 million with a special offer including a lower interest rate and a maturity period of 13 years, with a grace period of up to three years.

Antam initially planned to obtain loans of up to US$240 million and US$255 million from IKB Hermes to partly finance the construction of its third smelting plant and power plant which would cost about between US$360 million and US$380 million. The additional funds would come from its own fund of about US$50 million and another US$75 million from Bank Mandiri.

Antam, however, cancelled the plan to obtain the loan from IKB Hermes after the mining company offered the construction of the power plant to an independent investor. This enabled the company to reduce the total spending to US$240 million. Bank Mandiri would provide about US$150 million and the remainders would be financed from the proceeds of Antam?s US$150 million bond offering.

Antam?s president director D, Aditya Sumanegara, however, refused to comment about the latest offer made by IKB Hermes. (*)