Waskita Rebuffs Suitors, Cancels Divestment

JAKARTA (TheInsiderStories) – State-owned construction firm, PT Waskita Karya Tbk (IDX:WSKT) has announced that the rights issue and divestment of PT Waskita Toll road (WTR) has been cancelled and is expected to be executed in the first half of next year.

Corporate Secretary of Waskita Karya Shastia Hadiarti in the announcement said, that the divestment of 10 toll roads was actually planned to be realized in the second quarter of this year. However, after an assessment of several incoming offers from potential investors, management concluded that none had met the target expected by WTR.

“Furthermore, as one of the alternatives to financing infrastructure projects, especially toll roads, Waskita and Waskita Toll Road are still planning to divest the toll roads,” she said on Tuesday (12/9) by adding that the scheme of the divestment is still under management review.

As previously announced, Waskita intends to divest 10 toll segments consisting of several packages, the first consisting of toll roads with 100 percent ownership by Waskita, namely Kanci – Pejagan, Pejagan – Pemalang, and Pasuruan-Probolinggo.

The second package includes a toll road split between 40 percent Waskita and 60 percent of PT Jasa Marga Tbk (IDX: JSMR), namely Batang – Semarang, Solo – Ngawi, and Ngawi – Kertosono. The third package is to be sold one by one. The toll roads in this package include, Kayuagung – Palembang – Betung, Becak Kayu from Kalimalang, and Medan – Kualanamu – Tebing Tinggi.

The purpose of the divestment is to find alternatives to meet the needs of Waskita expansion, funds which will reach Rp120 trillion for the next few years.

Previously, there were rumors that some 14 names had expressed interest in the tender, including Jasa Marga, PT Astratel Nusantara, Rajawali Corpora, Macquarie from Australia, as well as several other companies including from China and Malaysia.

Mirae Asset Sekuritas Analyst Franky Rivan told to worth nothing is that the company aims for 2x price to book value, while the bids received have been far below expected valuations. He expects continued pressures on the company’s balance sheet, as it has the highest-leveraged position compared to other builders.

“Having said that, we believe slower new contracts achievements by WSKT could happen this year, following the divestment cancelation,” he admitted.

The value of Waskita’s new contracts up to the first week of Sept. 2017 amounted to Rp43 trillion, still dominated by infrastructure projects, especially toll roads.

Writing by Elisa Valenta, Email: elisa.valenta@theinsiderstories.com