PT adaro Energy Tbk ( ADRO ) is considering taking external financing to finance high-cost projects. For example, the aluminum smelter project and hydroelectric power plant or hydroelectric power plant in North Kalimantan.
“External financing for our projects such as Aluminum Smeltar and also Hydro Power. “If there is a Hydro project, we will need external financing, because this project requires large capex (capital expenditure),” said ADRO Chief Financial Officer (CFO) Lee Lukman in Public Expose Live, Tuesday (28/11/2023).
He said that the capital expenditure budget which is quite large to build these two projects cannot only rely on funding from coal business proceeds, but also requires cooperation with banks which have been supporting the company.
“It is impossible for us to use funding from coal (business) proceeds alone for this large capex, but we will invite banks that have supported us to participate in this national project,” he explained.
However, currently the company has no plans to issue debt securities, considering the high interest rates. His party will again review the urgency of issuing debt securities to finance the adaro Energy project.
“For the issuance of debt securities, currently we know that interest rates are very high and we will study and analyze when is the right time to enter the bond market,” he explained.
So far, Lukman ensures that the company’s financial condition is still sufficient. The company continues to review very high interest rates, and the appropriate form of funding composition for the adaro Energy business.
“We always review this from time to time,” he continued.
On the other hand, his party has made hedging efforts to overcome the problem of forex losses or exchange rate losses considering that adaro Energy’s coal sales business is mostly carried out through US dollar currency transactions.
“The impact of forex loss is very small because we have done natural hedging,” he said.
Meanwhile, for bonds that mature in 2024, his party has prepared funds to make these payments. His party emphasized that it would continue to review the project and how much funding is needed, as well as the ability to pay in the future.
“We always review our projects, how much we will pay in full, and which payments we will refinance with bonds or bank loans , we will see. “Currently we have sufficient liquidity to make payments,” he stressed.
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Source >>> https://money.kompas.com/read/2023/11/29/113400726/adaro-energy-pertimbangkan-pembiayaan-eksternal-untuk-proyek-besar?page=all
Source https://djakarta-miningclub.com