JAKARTA (TheInsiderStories) – Indonesia construction company, PT Wijaya Karya Tbk (IDX: WIKA) plans to issue rupiah-denominated global bonds or Komodo Bonds worth Rp6 trillion (US$428.57 million) in 2021,” management told the media on Tuesday (12/03).
WIKA’s Corporate Secretary Mahendra Vijaya explained, the company is currently formulating in detail the value of the bond issuance and its use. “The value of the issuance can be up to Rp6 trillion, but exactly it is still under study,” he said.
While WIKA’s Director of Finance Ade Wahyu said, the proceeds from the issuance of bonds will be used for refinancing global bonds that will mature in January 2021. Komodo Bonds were previously issued in January 2018 with a value of Rp5.4 trillion and listed on the London stock exchange.
This year, the company also offered a perpetual bond instrument to the investors of Rp1.4 trillion. The local perpetual bonds were not interested by the local investors, but also by the foreign investors.
The global bonds could be one of the company’s funding source to meet capital expenditure. Next year, WIKA will allocate capital expenditure to Rp16 trillion. One of the purposes of the budget allocation is for toll road construction.
Besides, the capital expenditure will be used to strengthen the source of recurring income. Not to mention that, the capital is also used for the main business, toll road.
This year, WIKA allocated capital expenditure of Rp18.1 trillion, but its use is still below 10 percent. Vijaya said the low of capital expenditure’s absorption is due to the low of company need. They would boost capital expenditure absorption in the second half of 2019 as there were many projects offered to the company.
Previously, the company has announced will build Goree Tower Project in Senegal with funding of 50 million euros ($55 million) from Indonesia Eximbank, part of a total agreement of 250 million euros. WIKA’s Director of Operations Destiawan Soewardjono said the project was a concrete follow-up to business deals between the Senegalese government and WIKA and Indonesia Eximbank at the Indonesia-Africa Infrastructure Dialogue (IAID) event in Bali in August.
Soewardjono further explained the prestigious project “mixed-used building area” with full design and build project types was carried out by WIKA as the main contractor with a 24-month implementation period.
The company’s scope of work includes the construction of five-star hotels with 33 floors, sky dining, office buildings, convention centers, and residential apartments.
For the project, WIKA obtained a national interest account (NIA) financing facility using the buyer’s credit scheme via Indonesia Eximbank. Soewardjono said the distribution of these facilities was in line with the government’s strategy to expand Indonesia’s exports to non-traditional countries including Africa.
The atmosphere, of course, gives the company room to expand into foreign markets, Soewardjono said. In 2020, the company targets three new countries in the West and East Africa includes Senegal, Ivory Coast and Zanzibar-Tanzania with a capital of $370 million.
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