Photo by Wika Bangunan Gedung

At an Initial Price of Rp290-456 per Share

JAKARTA (TheInsiderStories) – PT Wka Bangunan Gedung Tbk, a subsidiary of state-owned construction firm PT Wijaya Karya Tbk (IDX: WIKA), will sell 4.47 billion shares (40 per cent of enlarged capital) to investors at an indicative price between Rp290 and Rp456 per share.

The offer runs from October 26 until November 7, and will be handled by four securities firms, including PT Mandiri Sekuritas as joint lead underwriter. The company expects to reap up to Rp2.04 trillion from the IPO.

70 per cent of the proceeds will be used for infrastructure projects and concession investments, and the remaining 30 per cent will be directed to working capital, Nariman Prasetyo, its CEO said in a Press Conference on Thursday. The Company hopes to gain a listing on the Indonesia Stock exchange by November 30.

In first half (1H) 2017, the company booked Rp1.3 trillion revenue and Rp106 billion profit, up by 54.4 per cent and 69.5 per cent on an annual basis, respectively. As a ‘total solution contractor’, the company has a range of business unit including construction, investment and a concession business unit.

The Company has completed more than 154 projects, budgeted at Rp18.74 trillion, since it was established in 2008, and will grow larger since the government has been urging subsidiaries of state-owned enterprises to raise capital from the stock or bond markets to help boost investment and promote infrastructure development.

Nur Al-Fatah, Human Capital and Investment Development Director, added that the company will use funds from the IPO for the construction of airports and development of housing compounds, as well as strengthening its supply chain in the geo-technical sector. With the additional funds, the company will be able to secure projects worth more than Rp10 trillion.

He added that business in the property sector offered potential income as a result of steadily increasing demand each year. The Government of Indonesia also directs construction companies to invest in development of social infrastructure projects, such as hospitals.

“Current demand for hospital beds across the country reaches 20,000 per year and is expected to reach 30,000 beds by 2019,” he said.

Writing by Yosi Winosa, Email: yosi.winosa@theinsiderstories.com