Indonesia’s Jababeka Considers to Buyback Bond US$300M

PT Kawasan Industri Jababeka Tbk (IDX: KIJA) took a number of steps related to the risk of default on senior notes issued by its subsidiary, Jababeka International BV in Oct. 5, 2016 with worth US$300 million - Photo by the Company

Jakarta (TheInsiderStories) – Indonesian property developer, PT Kawasan Industri Jababeka Tbk (IDX: KIJA) took a number of steps related to the risk of default on senior notes issued by its subsidiary, Jababeka International BV in Oct. 5, 2016 with worth US$300 million. One option is to buyback the senior notes, said the management.

But according to Jababeka’ president director Tedjo Budianto Liman, the company can’t execute the planned caused the new shareholders has been proposed new top management to lead the company. The decision was taken by PT Imakotama Investindo (6.38 percent) and Islamic Development Bank (10.48 percent) after become the shareholders of the company.

At the latest Jababeka‘ annual general meeting in June 26, the two companies proposed Sugiharto as President Director and Aries Liman become a commissioner and get approval from the shareholders. Since that, he assessed the potential failure of its subsidiary began.  

The problem is its unit has been released the buyback program before the appointment of the new management. Liman told media on Monday (07/08), “The management still investigating the acting in concert. It is still in process.”

Followed the dispute, the company through Jababeka International is required to offer buyback to the bondholders with the price of 101 percent of the original value of $300 million plus the interest rate. In case, the developer is failed to run the buyback program, its unit is declared in default position.

Followed the dispute, Indonesia Stock Exchange has suspended the Jababeka‘ stock since the second half day trading on Monday. Before suspended the KIJA’ share stopped at Rp304. The bourse said will investigated further on the case.

Jababeka International issued Guaranteed Senior Notes that has a due date in 2023 and value of $110.85 million. The notes are further guaranteed by senior notes of$189.15 million. So, in total the unit has notes $300 million.

Joko Darmono was established the industrial estate developer in 1989 and being listed on the Jakarta and Surabaya Stock Exchange in 1994. Its core business is developing industry-based real estate, supported and enhanced by infrastructure and township management services.

The company flagship industry-based township, Kota Jababeka, in Cikarang, is strategically located 35 kilometers east of Jakarta along the Bekasi-Cikampek corridor, which connects Jakarta and Bandung, as part of a joint venture with PT Plaza Indonesia Realty Tbk (IDX: PLIN).

Jababeka also develope an integrated township in Tanjung Lesung, Banten, that caters to the tourism, hospitality and leisure industries. Tanjung Lesung, which enjoys special economic zone status, lies approximately 170 kilometers southwest of Jakarta.

In addition to these estates, land acquisition is ongoing in the Kendal Regency of Central Java, which is approximately 450 kilometers east of Jakarta, as part of a joint venture with SembCorp to develop Kendal Industrial Park.

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