Photo: Wijaya Karya

JAKARTA (TheInsiderStories)–PT Wijaya Karya Realty (Wika Realty), a subsidiary of state-owned construction company PT Wijaya Karya, postponed a planned initial public offering (IPO) due to market condition.

Wika Realty has sent a letter to postpone the IPO, said Director of Corporate Assessment at IDX Samsul Hidayat on Tuesday (21/05). He added the delay is done purely due to market consideration as Indonesia’s capital market is quite depressed in the recent months.

Jakarta Composite Index (JCI) closed at 5,733.85, down by 49.46 per cent or 0.86 per cent on May 21, 2018, extending last week drop of 0.56 per cent of 32,61 points at level 5,783.31. Foreign investor posted Rp792.13 billion in net sell yesterday.

Wika realty has not announced a new schedule on the IPO plan. The company is watching the market condition to conduct the IPO.

In the initial plan, the company sought to raise US$172.83 million to US$229.63 million from an initial public offering scheduled in May. The company will release 12.51 billion shares, equivalent to 25 per cent of its total paid-up capital. The company has set its IPO price at Rp195-Rp255.

The firm planned to use 20 per cent of the IPO proceeds to help fund capital expenditures on the existing projects. Another 43 per cent will be used for the land acquisition.

The company is working on 22 new projects and plan to work on seven more projects worth as much as Rp600 billion to Rp700 billion this year.

The Wijaya Karya plans to inject Rp 1.44 trillion to Wika Realty to support the company’s growth in 2017-2021. The company’s shareholders approved the plan on this capital injection on March 26, 2018.

The capital injection will finance the development of a plot of land in Laswi, which is owned by state railway operator PT Kereta Api Indonesia. Wika Realty gas allocated Rp1.58trillion for capital expenditures this year.