Semen Kupang needs capital injection

Semen Kupang needs capital injection
Published: 14 April 2009

State cement maker PT Semen Kupang, lying idle since early last year, will need a capital injection of Rp250bn (US$22.7m) to resume operation and service debt.

The company could not operate as it ran out of working capital, the Indonesian Cement Association said.

The government should step in and help restructure the debt of the company to allow it to resume operation, an official of the association said.

The cement company expanded its capacity from 300,000t to 570,000tpa using US dollar loan in 1998 when the value of the rupiah plunged resulting in much heavier debt repayment burden.

Currently the company has Rp394bn in principal debt and no bank has agreed to provide loan to allow the company to resume operation, the newspaper Investor Daily said.