JAKARTA (TheInsiderStories) – The construction firm, PT Waskita Karya Tbk (IDX: WSKT) raised a bank loans Rp2 trillion from state-owned lender, PT Bank Negara Indonesia Tbk (IDX: BBNI). The funds will be uses to pay their obligation worth of Rp2.5 trillion (US$168.91 million), due on Oct. 6 and 16.
On Monday, the company has paid debt Rp1.43 trillion. The company has obligations to refinances two series of bonds that mature in this month. Series A amounting to Rp1.37 trillion with an interest rate of 8 percent matured on Oct. 6. Then bond with worth of Rp1.15 trillion with 11.1 percent of coupon rate will mature on Oct. 16, 2020.
Waskita once stated that would continues to improve the company’ liquidity capacity by accelerating the receivables of construction project with a turnkey payment scheme. As of August 31, 2020, the builder has received a turnkey project payment of Rp7 trillion and a progress payment scheme of Rp6.5 trillion.
The issuer also continues to pursue to acquiring a new contract values with a target of Rp27 trillion in 2020. As of the third quarter of 2020, the company has pocketed the new contracts of Rp11.7 trillion, with the largest contribution coming from infrastructure projects such as toll roads, dams and irrigation.
Today, Fitch Ratings has cut Waskita‘ long-term national rating from ‘B (idn)’ to ‘CCC (idn)’ due to potential liquidity pressures in the near future. Based on the report, the rating reflects the high risk of default to other companies or debt securities in Indonesia.
“In accordance with Fitch’ policy, the company filed an appeal and provided additional information to us which resulted in a rating action that was different from the initial results of the rating committee,” wrote the report.
With the six-month loan from Bank Negara Indonesia, Fitch views, the liquidity pressure and refinancing risks at Waskita still high due to the weakening its cash position and debt maturing in the near term.
Beside the bonds, the issuer also has supply chain financing debt of Rp5 trillion in the fourth quarter of 2020 and Rp1.2 trillion of bonds due in February 2021. Fitch said, the pandemic had a significant impact on the company operations, with longer working capital cycles and slower cash collections from construction projects.
The economic downturn due to the pandemic resulted in a decrease in cash position from Rp9.3 trillion at the end of 2019 to Rp1.4 trillion at the end of June 2020. In terms of performance, Waskita posted consolidated operating revenues of Rp8.04 trillion in the first semester of 2020, or down 45.68 percent from the previous year worth of Rp14.79 trillion. The issuer also posted a net loss of Rp1.09 trillion, reversing the net profit position of Rp997.82 billion as end of June 2019.
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