State-owned construction company Waskita Karya’s (Waskita) maturing Rp 1.15 trillion (US$78 million) bonds have secured a BBB+ investment grade from Indonesian rating agency Pemeringkat Efek Indonesia (Pefindo).
The builder is expected to collect Rp 35 trillion in project payments this year.
Pefindo expects Waskita to repay its 2015 series B bond, which will be due on Oct. 16, using its internal cash obtained from construction projects, according to a Pefindo publication released on Wednesday.
Waskita finance director Taufik Hendra Kusuma said the company had received Rp 12.5 trillion in infrastructure payments in the first half of 2020, mostly from turnkey projects.
“We’ve received Rp 7.1 trillion from turnkey project payments, with the biggest portion coming from the Jakarta-Cikampek II elevated [toll road] project,” he said in a press release on Thursday.
Construction on the Jakarta-Cikampek elevated toll road began in July 2017 and was inaugurated by President Joko “Jokowi” Widodo in December 2019. The elevated road spans around 36 kilometers and costs around Rp 16.2 trillion.
Furthermore, Taufik said the company was also expecting a Rp 4 trillion land acquisition repayment from the State Asset Management Agency (LMAN) by the end of the year, as well as Rp 3.3 trillion from varying projects in the near future.
“We will use the funds to repay our maturing debt. Our BBB+ rating shows that Waskita can minimize any financial risks amid pressures from the COVID-19 pandemic,” he added.
As of March 31, Waskita has a cash balance of Rp 6.1 trillion, compared to Rp 4.1 trillion in maturing debts and Rp 7.9 trillion in unused credit facilities, according to Pefindo.
The World Bank, through its public expenditure report, had urged the government to reduce its dependence on state-owned construction companies for toll and national road development projects, as the companies are already overleveraged.
According to the report, Waskita, toll road operator Jasa Marga and state builder Hutama Karya’s average liability-to-equity (LE) ratio stood at 3.8 in 2017, more than twice the average LE ratio for comparable private firms in emerging markets.
