Aneka Tambang Tbk (ANTM) provides USD 34.55 million or equivalent to IDR 460.23 billion to its subsidiary, PT Indonesia Chemical Alumina (PTICA) to pay the principal installment and interest on the debt, and to fulfill the financial covenant to the creditors of PTICA.
According to ANTM’s management, the loan is granted because ANTM as the holder of 80 percent of PTICA must help the company’s cash availability to fulfill its obligations to Japan Bank for International Cooperation (JBIC) and commercial banking. “If ANTM does not provide financial support, PTICA will become default because it does not fulfill its obligations to repay maturing loans to JBIC and commercial banks in accordance with the common terms agreement (CTA),” said the management.
On December 15, 2016 and June 15, 2017, PTICA did not repay the matured loan from JBIC and the commercial banks and become default. As of June 30, 2017, total repayment of principal loan and matured interest plus late fees reached IDR 567.3 billion. ANTM assumes 80 percent of the obligation while the rest will be fulfilled by Showa Denko, a holder of 20 percent of PTICA.
Public Appraiser Office (KJPP) Tri, Santi, and Partners, assessed the loan transaction was reasonable because the interest rate which is charged at LIBOR + 3.25% per annum was in accordance with the prevailing interest rate in the current market.
This is not a material transaction because the loan reaches 2.57 percent of ANTM’s equity as of June 30, 2017 reaching IDR 17.87 trillion. In the first trading session on Friday (29/9), ANTM rose 3.1 percent to IDR 650. (*)