Mittal eyeing 40 percent of Krakatau Steel shares: BKPM

World's leading steel producer Arcelor Mittal has expressed interest to buy a part of state-owned steel maker PT Krakatau Steel (KS)'s shares as part of the company's expansion plan in the country.

Through its subsidiary PT Ispat Indo, Arcelor which is controlled by Indian billionaire Lakshmi Mittal, had offered to buy between 30 and 40 percent of KS shares, Muhammad Lutfi, the chairman of the Investment Coordinating Board (BKPM), said in Jakarta Monday.

The price of the shares had not been negotiated but the company would first let the government to decide the price before making a firm bid, he said.

Lutfi said that with the partnership with Arcelor, the government hoped KS, which at present produces about 2.5 million tons a year, could expand its steel business.

KS, which is currently preparing its initial public offering to raise funds for its expansion plan, warmly welcomes Arcellor's offer.

"The sale of KS shares to a strategic partner has also become one of options in securing financing for the expansion," said Fazwar Bujang, the president director of KS.

KS said earlier that the funds to be raised from its IPO would be used to double its steel production to five million tons a year by 2011. (*)