State-owned bank interest is not competitive PT Freeport's divestment

By : Herry Barus And Aldo Bella Putra | Tuesday, August 07 2018 - 14:00 IWST

PT Freeport Indonesia. (Ist)
PT Freeport Indonesia. (Ist)

INDUSTRY.co.id - Jakarta - State-owned bank interest is considered not competitive to become a lender or financing to Inalum who bought PT Freeport Indonesia shares.

Deputy of Mining Business, Strategic Industry and Media Ministry of BUMN Fajar Harry Sampurno in a discussion "Lika Liku Acquisition of Freeport Shares" in Jakarta, Monday (08/06/2018) said the exchange rate pressure made domestic banks, including state-owned banks, provides interest higher loans than foreign banks.

"State-owned banks are not unwilling to finance. So there is pressure on 'foreign exchange' so that the interest of domestic banks is higher than that of foreign banks," he said.

Harry explained that by calculating the loan interest, it would be more profitable for Inalum to borrow from foreign banks.

"If state-owned banks are more competitive, they could be. Especially good because they are a synergy of SOEs. But for a loan of this size, our state-owned banks may not have large allocations," he said.

Previously, Harry said there were 11 lending banks to Inalum to buy the divestment of PT Freeport Indonesia shares.

However, he said the number included three state-owned banks in addition to foreign banks.

"11 may include non-performing BUMNs, namely three banks. But yes there may be additional, I don't know," he said without explaining in more detail.

In accordance with the head of agreement (HoA) signed on July 12, 2018, Inalum will buy Freeport's 3.85 billion divested shares.

The details of the 3.5 billion US dollars allocated for the payment of Rio Tinto's participation rights in Freeport and the remaining 350 million US dollars to buy Indocooper shares in Freeport.

The Japanese bank, The Bank of Tokyo-Mitsubishi UFJ Lt, will be the head of the syndicated lender bank to Inalum to control 51 percent of PT Freeport Indonesia's shares.

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