Wijaya Karya Offers Global IDR Bonds US$400M

Photo: Wijaya Karya

JAKARTA (TheInsiderStories) – Publicly listed construction firm, PT Wijaya Karya Tbk (IDX: WIKA) is ready to offer US$400 million (Rp5.3 Trillion) global IDR bonds (Komodo Bonds) for investors to fund capital expenditure and repay part of its existing borrowings. The company will hold a roadshow on Jan. 16 to 19.

Recently, the state-owned company has submitted a proposal for a $700 million loan to China Development Bank, related to funding the construction of Indonesia-China high-speed railway connecting Jakarta and Bandung, West Java.

Bintang Perbowo, President Director of WIKA said with the completion of the entire licensing process, the company expects fresh funds to finance the project to be immediately disbursed.

WIKA is part of local consortium Pilar Sinergi BUMN Indonesia, which also includes state railway operator PT Kereta Api Indonesia, state plantation firm PT Perkebunan Nusantara VII and state-controlled toll road operator PT Jasa Marga Tbk (IDX:JSMR).

Moody’s Investors Service has assigned a Ba2 rating to Wijaya Karya’s proposed Indonesian rupiah-denominated, the rating agency reported on Monday (15/1).  

“The proposed bond issuance will improve WIKA’s liquidity profile, because it plans to use the proceeds to repay around Rp1.75 trillion in short-term debt, with the remaining funds allocated towards partially pre-funding planned capital expenditures and investments,” says Maisam Hasnain, a Moody’s Analyst.

WIKA’s planned capital expenditure and investments include toll road construction projects, transit-oriented development projects, and equity investments in the Jakarta to Bandung High Speed Rail project, in which WIKA has an effective 22.8 per cent stake.

Established in 1960, WIKA is one of the largest engineering, procurement and construction companies in Indonesia, with revenues of around Rp22.2 trillion for the 12 months to Sept 30, 2017 (Q3), and an order book of Rp94.4 trillion as of the same date.

Listed on the Indonesian Stock Exchange since 2007, WIKA is 65 per cent owned by the Government of Indonesia (Baa3 positive), with the remaining 35 per cent shares held by members of the public.

Based on the financial statements extending to the Q3 of 2017, WIKA booked a net profit of Rp682 billion, increased 46.66 per cent, compared to the same period last year, when it marked Rp465 billion.  Meanwhile, WIKA’s net sales rose from Rp9.34 trillion in the third quarter of 2016 to Rp15.88 trillion in the third quarter of 2017, an increase of 69.99 per cent.

Last year, WIKA also has secured Rp894 billion ($66.22 million) from PT Bank Mandiri Tbk (IDX: BMRI) and PT Bank Negara Indonesia Tbk (IDX: BBNI). This loan will be allocated to finance land acquisition needed for the 84 kilometer-long Serang-Panimbang toll road.

PT Wijaya Karya Serang Panimbang estimated the company will need around Rp2.2 trillion funding for the planned 51-kilometer toll road. The company started the land clearing process in May 2017 and targets clearing 100 percent of necessary land for the toll road project by June 2018.

The 83.6 km toll road development is one of the national infrastructure priority projects, intended to provide access to the Tanjung Lesung Special Economic Zones and Ujung Kulon National Park. 33 kilometers of the road will be constructed by the government.

Head of OSO Sekuritas Riska Afriani predicted, WIKA’s global bond coupon will be around 3 to 4 per cent.

US$1: Rp13,500

Email: linda.silaen@theinsiderstories.com