Home News Indonesia’s Hutama Raises US$600M from Global Bond Issuance

Indonesia’s Hutama Raises US$600M from Global Bond Issuance

PT Hutama Karya has issued a global medium term notes US$600 million with tenure 10 years and a coupon rated of 3.75 percent, said the toll road operator on Tuesday (05/05) - Photo by the Company

JAKARTA (TheInsiderStories) PT Hutama Karya has issued a global medium term notes US$600 million with tenure 10 years and a coupon rated of 3.75 percent, said the toll road operator on Tuesday (05/05). The amount lowers than the initial target $1.5 billion. 

Earlier, the company was pinned investment grade rating from Moody’s Rating and Fitch. CEO of Hutama, Bintang Perbowo stated, the proceeds from these global bonds will be used to  completing the Trans Sumatra toll road for Binjai – Langsa, Bukit Tinggi – Padang, Pekanbaru – Bukit Tinggi, Indralaya-Muara Enim, Lubuk Linggau- Bengkulu, and Sigli-Banda Aceh sections.

The toll road mega project have total length more than 2,769 kilometers. He stated, “The development of the construction industry has a strategic role as a driver of the national economic growth.”

Since 2014, the operator has been given a mandate by the government to build the Trans Sumatra. Until now, around 500 kilometers (km) of toll roads have been built, with 368 km has fully operational like the Bakauheni-Terbanggi toll road Besar (140 km), the Terbanggi Besar-Pematang Panggang-Kayu Agung toll road (189 km), the Palembang – Indralaya toll road (22 km), and the toll road of Medan – Binjai (17 km).

As for 2020, Hutama Karya is targeting to complete the construction of several priority sections including the Pekanbaru – Dumai toll road (131 km), Sigli – Banda Aceh toll road section 4 (13.5 km), and the Medan – Binjai toll road section 1 (6 km) is targeted to be completed in July 2020.

Earlier, minister of public work and public housing, Basuki Hadimuljono said, that the construction of the project could increase accessibility to Lake Toba, one of the main tourism destination in the archipelago. HE added, the government is also completing the preservation and widening of the 145.9 Km Samosir Island ring road.

With the completion of the toll road work, the tourists also have the choice of a land transportation route to get to Samosir Island from Silangit. During this time, the main access to get to Lake Toba and Samosir Island from the direction of Medan is via Parapat and crossing by ferry.

In addition to accelerating travel time from Medan to Lake Toba, he said, the toll road is also expected to spur economic growth in North Sumatra including the economic sector of the Port of Kuala Tanjung and tourism destination of Lake Toba which can be reached quickly.

Established in 1961, Hutama Karya is one of the largest EPC in Indonesia by revenue. The operator is 100 percent owned by the Government of Indonesia through the ministry of state own enterprises.

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