Hong Kong' Kings Key Ltd. signed a conditional sale and purchase agreement to acquire 40 percent of two toll road concession owned by PT Waskita Toll Road (WTR), unit of PT Waskita Karya Tbk (IDX: WSKT) - Photo by the Company

JAKARTA (TheInsiderStories) – Hong Kong’ Kings Key Ltd. signed a conditional sale and purchase agreement to acquire 40 percent of two toll road concession owned by PT Waskita Toll Road (WTR), unit of PT Waskita Karya Tbk (IDX: WSKT). The deal worth of Rp2.1 trillion (US$148.93 million), said the management.

“There is a further funding opportunity of Rp 863 billion or US$61.2 million,” said Road King Infrastructure Ltd., parents of Kings Key Road King in a written statement released today (10/02) through its subsidiary

The deal has been signed Sept. 30. The shares of the two toll roads purchased by Kings Key belonged to subsidiary of WTR, PT Jasamarga Solo Ngawi (JSN), the operator of the Solo – Ngawi toll road and PT Jasamarga Ngawi Kertosono Kediri (JNKK), the operator of Ngawi – Kertosono toll road.

The acquisition payment will be paid in stages. First, Kings Key paid an advance of Rp1.32 trillion for a 40 percent stake in JSN. Then, the company paid Rp562 billion for 40 percent of JNKK shares.

The value to be paid to complete the transaction is around Rp226 billion plus interest costs of Rp63 billion and a provision fee of Rp772 million. Kings Key will pay 60 percent of the purchase price of JNKK shares and 100 percent of the purchase price of JSN, as well as loans to JNKK on the settlement date.

Next stage, around 40 percent of the purchase price of JNKK shares will be paid by Kings Key in the first anniversary of transaction completion. To secure the payment, Kings Key or controlling shareholders will provide WTR credit support, which includes a bank guarantee or escrow account.

After the completion of transaction, the composition of JSN and JNKK shareholders will be  Kings Key 40 percent, PT Jasa Marga Tbk (IDX: JSMR) 40 percent and PT Lintas Marga Jawa 20 percent.

Road King  is not a new player in the toll road business. The company has managed 340 kilometers of toll roads in China since 1993. The toll road portfolio is spread across four provinces, Anhui, Shanxi, Hebei and Hunan.

The five sections managed by the Road King are Changsha – Yiyang Expressway (69 kilometers), Ma’anshan – Chaohu Expressway (36 kilometers), Yuci Longbai Village – Chengzhao (72 kilometers), Baoding – Tianjin Expressway (105 kilometers), and Tangshan – Tianjin Expressway (58 kilometers).

In 2018, Road King’ revenues from the toll road business was around Rp6.12 trillion. Average daily traffic in the five toll roads managed by Road King reached 259,000 vehicles last year, growing 11 percent compared to 2017.

While, Waskita Karya injected funds of Rp1.19 trillion to WTR. The capital will be used for operational activities of the unit. WTR will placed the cash to its unit PT Citra Waspphutowa (CW) with total amount Rp61 billion.

CW owned 25 percent stake in Depok – Antasari toll road concession in West Java, joined with state-owned investment holding PT PP Tbk (IDX: PTPP) and publicly listed toll road operator PT Citra Marga Nusaphala Persada Tbk (IDX: CMNP). Both company hold 12.5 percent and 62.5 percent, respectively.

“Initial capital for the construction of the Depok – Antasari toll road space amounted to Rp1 trillion, but then increased to Rp2.12 trillion,” the company explained on the injection funds purpose.

Waskita Karya‘ owned 80.56 percent stake of WTR or equivalent to Rp12.83 trillion, while the other shares hold by PT Dana Tabungan dan Asuransi Pegawai Negeri (8.29 percent or Rp1.32 trillion) and PT Sarana Multi Infrastruktur (11.14 percent or Rp1.77 trillion).

Recently, Toll Road Regulatory Agency has ordered WTR joined with other state owned toll road operator, PT Hutama Karya and JSMR, to build toll road projects in North Sumatera. The project has values Rp13.4 trillion. The projects including the construction of the Kuala Tanjung – Tebing Tinggi – Parapat toll road, in Medan, North Sumatra with total costs Rp9.6 trillion and targeted to operate in 2020 with a 40-year concession period.

The 143.5 kilometers (km) toll road project is a continuation of the 61.72 km Medan – Kualanamu – Tebing Tinggi toll road. Previously the Medan – Kualanamu – Tebing Tinggi had been completed and connected to the Belawan – Medan – Tanjung Morawa toll road.

The toll road project is considered to increase the connectivity of tourist destination, including access from Medan to the Lake Toba National Strategic Tourism Area.

The toll road will consist of six sections, namely section one Tebing Tinggi – Inderapura (20.4 km), section two Inderapura – Kuala Tanjung (15.6 km), section three Tebing Tinggi – Serbelawan (30 km).

Then, section four Pemelawan – Pematang Siantar (28 km), section five Pematang Siantar – Seribudolok (22.3 km), and section six Seribudolok – Parapat (16.7 km). The toll road will have seven interchanges in Inderapura, Tebing Tinggi, Serbelawan, Pematang Siantar, Seribudolok, Parapat, and Simpang Susun Raya.

Minister of public works and public housing Basuki Hadimuljono said the construction of the project could increase accessibility to Lake Toba, so that tourists have many choices of transportation routes, ranging from air, sea, and land transportation modes.

US$1: Rp14,100

Written by Staff Editor, Email: theinsiderstories@gmail.com