JAKARTA (TheInsiderStories) - Two Indonesian companies, PT Terregra Asia Energy Tbk (IDX: TGRA) and PT Waskita Karya Tbk (IDX: WSKT) have signed a master agreement to construct five mini hydro power plants in North Sumatra and two hydropower power plants in Aceh, the issuer announced today (01/05). The projects need an investment costs Rp12.5 trillion (US$892.86 million).
Djani Sutedja, president director of Terregra, stated the company has signed a Power Purchase Agreement with state-owned utilities firm, PT Perusahaan Listrik Negara. The five power plants have a capacity of 42.98 megawatts (MW) and the two hydro power have a total capacit 467 MW.
The producer was established on Nov. 7, 1995 and started operations in 1996 with a main focus producing various renewable energies ranging from hydro to solar power. Before change the name in 2016, the company name was PT Mitra Megatama Perkasa. In 2010, the company has established the first hydro power plant in Sumatra. A
On May 16, 2017, Terregra became the first renewable energy firm take a floor on the Indonesia Stock Exchange by sold 550 million shares. In September 2020, the issuer divested its ownership of its unit, PT Terregra Solar Power for Rp121.76 billion.
While, Waskita had received around Rp12.5 trillion in funds from turnkey project payments and ready to pay the company debts. Finance director, Taufik Hendra Kusuma, explained, the constructor also targeting to receives a return of land acquisition bailout funds from the state asset management agency around Rp4 trillion in this year.
Recently, PT Pemeringkat Efek Indonesia (PEFINDO) has lowered the builder’ shelf-registered bonds of 2015, 2016, and 2017 to “idBBB+” from “idA-” due to its high financial leverage and weak interest coverage. As reported the state construction firm have financial problems to refinances its debt.
“With no longer commensurate with an idA- rating, as well as our expectation that its financial leverage will continue to remain elevated as Waskita will continue to rely on external funds for working capital to carry out its contract backlog and investments,” said the PEFINDO.
The outlook for the corporate rating is maintained at “negative” to anticipate further weakening in its credit profile due to the challenging operating environment and economic fallout caused by the COVID-19, particularly if the pandemic prolongs, which could lead to increased restrictions as well as operations and supply chain disruptions, including delays in new project tenders.
The rating agency also explained that Waskita will use internal cash, most of which comes from turnkey project payments to pay off the maturing bonds. In addition, said the rater that the company will receive project payments totaling Rp35 trillion in 2020, both from turnkey and non-turnkey projects.
US$1: Rp14,000
Written by Editorial Staff, Email: theinsiderstories@gmail.com
