Mandiri ready to provide standby loan to Antam Tbk

State owned Bank Mandiri has agreed to co-finance the construction of PT Antam?s third ferro nickel processing plant (FeNi III) in Pomalaa, Southeast Sulawesi, with an initial commitment of providing US$75 million in standby loan for the project, Bisnis Indonesia reported on Wednesday.

President Director of the bank, ECW Neloe, said in Jakarta on Tuesday that Bank Mandiri which earlier promised to allocate about US$125 million loan for the project would only provide US$75 million for the construction of the third nickel processing plant.

"We will only provide US$75 million because Antam has received a firm commitment to get financing from German IKB Hermes," he was quoted as saying.

Antam?s President Director Dedi Aditya Sumanegara said Bank Mandiri was still discussing the legal aspect and due diligence of the planned loan with IKB Hermes as preparation before the closure of the financial agreement.

IKB Hermes has expressed its firm commitment to provide export credits to finance the construction of the third nickel plant which would cost about US$350 million to US$380 million. According Dedi, the German bank would act as the arranger in raising the export credits and there are three major international banks have expressed their interest to take part in the financing project.

Antam said earlier that the export credits from IKB Hermes was one of alternatives prepared by the widely diversified mining company to finance the construction of the third ferro nickel plant. The other alternatives, called by the company?s management as a contingency plan, included US$125 million standby loan from Bank Mandiri, Antam?s bonds worth US$175 million and internal funds of between US$50 million and US$60 million.

FeNi III will double Antam?s total production capacity to 26,000 tons per year. The plant which will be located in Pomalaa, South East Sulawesi, is scheduled to start commercial production in 2005. (*)